#business Link Solutions to be fined £50m over doomed Woodford flagship fund

#business Link Solutions to be fined £50m over doomed Woodford flagship fund

#enterprise Link Solutions to be fined £50m over doomed Woodford flagship fund

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Link Solutions to be fined £50m over doomed Woodford flagship fund on high of £306m invoice for victims

The agency that oversaw Neil Woodford’s doomed flagship fund is ready to be fined £50million by City regulators.

Link Fund Solutions faces the penalty on high of an order to hand up to £306million of redress to victims.

The superb, by the Financial Conduct Authority (FCA), is the newest signal {that a} long-running probe into the collapse of the Woodford funding empire may be nearing a detailed.

Frozen: Link - the firm responsible for supervising Woodford's management of his funds - decided to suspend the £3.7bn Woodford Equity Income Fund in 2019

Frozen: Link – the agency chargeable for supervising Woodford’s administration of his funds – determined to droop the £3.7bn Woodford Equity Income Fund in 2019

More than 300,000 savers who entrusted the stock-picker with cash have been ready for solutions since they had been blocked from accessing it in 2019.

The first trace that Link would be penalised got here final week.

Dye & Durham, a Canadian agency which was planning to purchase Link’s dad or mum – Link Group – revealed the FCA’s calls for for a redress scheme had thrown a spanner within the works.

The FCA confirmed it was ‘likely’ to drive Link to pay ‘up to £306million’ to victims, and yesterday added {that a} £50million superb would additionally be forthcoming.

Link has 14 days to reply to the draft warning discover. It may problem the superb or agree to settle the matter. Link stated it could ‘explore all options’.

Dzmitry Lipski, head of funds analysis at Interactive Investor, stated: ‘The drip, drip, drip of information is a curious way to conduct a major investigation after three years of silence.

‘Many questions remain unanswered, the issue of redress is far from certain, and wider investigations are still ongoing.’

He stated buyers deserved higher than a possible deal.

Hundreds of 1000’s of savers had been overlooked of pocket when Link, the agency chargeable for supervising Woodford’s administration of his funds, determined to droop the £3.7billion Woodford Equity Income fund in 2019 and ultimately shut it, after a flood of buyers tried to pull their cash out, following a run of poor efficiency.

Woodford invested in dangerous early-stage and unlisted shares, and was unable to promote them quick sufficient to return the cash.

When Link realised the extent of the issue, it determined to shut the fund, promoting the shares and returning the cash to buyers. 

But a number of gross sales had been at a knockdown worth, and savers have misplaced round £1billion because the fund was frozen.

Link can be dealing with lawsuits from RGL Management, Leigh Day and Harcus Parker – appearing on behalf of savers. 

While the FCA redress scheme won’t cowl buyers’ losses, the attorneys hope to wring more cash out of Link by means of the courts.

The FCA stated ‘multiple parties’ apart from Link had been nonetheless beneath investigation. It was thought to be inspecting Woodford, 62, senior workers, Hargreaves Lansdown, the funding platform which really helpful the fund proper up till its suspension, and Northern Trust, the depository charged with keeping track of Link.

Ryan Hughes, head of funding partnerships at AJ Bell, stated: ‘Investors will be increasingly hopeful that this sorry episode is closer to completion. 

‘Investors have waited patiently for the FCA to unearth what went wrong and put in place some form of compensation.

‘It now seems like they might finally be getting somewhere.’

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