The Evidence-Based Investor is launching a campaign this week for Woodford Equity Income investors seeking redress for the fund’s failures.
#JusticeForWoodfordInvestors will bring together information about the various legal actions taking place and the different options available for investors to seek redress. For the time being, campaign updates will be published on The Evidence-Based Investor.
Initially, the campaign will help recruit claimants for law firm Harcus Parker, who is expected to hit go on its class action lawsuit against Link Fund Solutions before the year’s end.
“As the fund’s authorised corporate director (ACD), Link had a fiduciary responsibility to investors in the fund,” said The Evidence-Based Investor founding editor and freelance journalist Robin Powell.
“It should have been supervising Woodford Investment Management, to ensure that investors’ money was being sensibly invested in assets which could produce income or growth, and that investors could redeem their shares on request.”
Focus on compensation
Powell said the campaign would be offering its support to other legal actions where appropriate, including those focused on Hargreaves Lansdown. Harcus Parker is one of five law firms pursuing firms connected with the Woodford Equity Income fund.
Asked if the campaign would also be seeking action from the regulator, Powell said the initial focus would be on compensation. “A large proportion of Woodford investors are already in retirement and can’t afford for this to drag on indefinitely.”
Nevertheless, he said it was disappointing that 18 months after the Woodford Equity Income fund suspension the Financial Conduct Authority has still not published a report from its investigation into the affair.
“All sorts of third parties have profited from the Woodford Equity Income fund, its huge popularity, and then its demise and the resulting fire sale. These third parties include administrators, analysts, brokers, platforms, media outlets and other asset managers. Not to mention Neil Woodford himself.”
Law suit to be filed ‘very soon’
Harcus Parker partner Damon Parker said he expects to file his clients’ claim “very soon”.
“We have set out our clients’ case in pre-action correspondence and are now preparing to file the case at court. We have a specialist team of leading barristers who have advised on the merits of the case and we have funding in place.”
Harcus Parker clients will say Link failed to fulfil its responsibilities to all fundholders, Parker said.
“Link, as the ACD, were responsible for the day-to-day management of the Woodford Fund. This included ensuring the fund was sufficiently liquid at all times and that investments were fairly valued.”
He added: “We are confident that we have a strong case and have invested substantial resource in the case on that basis.”
He made a case for Woodford investors to join the Harcus Parker claim over others. “If the case were to settle, or if the court were to make an award for damages, only those who have signed up as a claimant would benefit.
“Typically the terms of settlement in a case of this sort would be confidential and so they would not assist other investors in a follow-on claim.”
Target on Hargreaves’ back
In June, Nelsons became the first law firm to announce it was examining possible legal claims against Link.
Slater and Gordon, which began examining a case against Hargreaves Lansdown for its Woodford cheerleading in October, has also extended its investigation to Link. It has already decided that Hargreaves has a case to answer for.
Meanwhile, Leigh Day received a stream of inquiries from disgruntled Hargreaves clients when it became the first law firm to launch an investigation into a potential class action involving Woodford Equity Income investors in October 2019.
RGL Management and Wallace LLP are also working together on a case against Hargreaves, claiming the platform knew of liquidity issues in WEIF from November 2017, yet continued to promote the fund in its buy list.
Powell said the people who trusted the fund with their savings have lost substantial sums of money and that there’s still no end in sight.
“It’s time for investors to claim what’s rightfully theirs.”
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