A law firm that is mounting a case against Hargreaves Lansdown over the implosion of Woodford Equity Income has said it is “actively considering” possible claims against the fund’s authorised corporate director Link Fund Solutions.
Slater and Gordon announced it was investigating Hargreaves over its potential cheerleading of Neil Woodford last October, weeks after Link pulled the plug on the fallen manager’s frozen equity income fund and initiated wind-down proceedings.
At the time, the firm noted the D2C firm had continued promoting Woodford Equity Income via its best buy lists, despite having concerns about the level of hard-to-sell assets since late 2017, and said it was looking into whether the price achieved when buying and selling instruments, such as ordinary shares, represents best execution.
Slater and Gordon said that, after reviewing the evidence, it now believes “there’s a case for Hargreaves to answer”.
“We have very carefully considered the facts which have led to investors losing millions of pounds in the Woodford Funds featured in the past on Hargreaves Lansdown’s ‘best buy’ list,” group litigation lawyer Karolina Kupczyk said.
“Having done so, we now believe there’s a case for Hargreaves to answer.”
Link a possible defendant
Kupczyk added that the firm was looking at possibly extending its investigation to include the fund’s ACD Link.
“We are also actively considering other potential defendants, such as Link, so that investors stand the best chance of recovering their money,” she said.
A representative from Slater and Gordon said the firm would issue a further update in the coming weeks.
Both Hargreaves and Link declined to comment.
A trail of investigations
Slater and Gordon is the second firm that has turned its attention to Link’s role in the Woodford debacle.
In June, Midlands-based business Nelsons, which is also looking into claims against Hargreaves, said it would be extending the scope of its investigation to include Link.
Nelsons partner Cathryn Selby, who specialises in professional negligence claims, explained that, during its probe ,the firm had become “more aware of Link Fund Solutions’ apparent failure to address at a much earlier stage the substantive issue of the increasing illiquidity of the fund”.
Two other firms – Leigh Day and Wallace with RGL Management – are currently investigating Hargreaves over its involvement in the Woodford scandal but have not singled out Link as a possible defendant.
Recovering money
A little over a year on, and the Financial Conduct Authority has yet to hold anyone accountable for the blow up of the Woodford Equity Income fund, which trapped hundreds of thousands of investors, including 291,520 Hargreaves customers.
So far Link has returned £2.27bn ($3bn, €2.5bn) to investors during the liquidation process, with the ACD announcing last week it had freed up an additional £58m to distribute to unit holders from the sale of 19 healthcare stakes to Acacia Research.
But British newspaper The Times has reported the maximum sum investors trapped in the now renamed LF Equity Income fund will receive once the wind down is complete is £2.7bn, a billion pounds less than the £3.7bn it held when it suspended in June 2019.
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