Take the money or face years in court, UK watchdog tells Woodford fund investors

Link Administration Holdings

04/10/2023 16:01

By Huw Jones
       LONDON, Oct 4 (Reuters) - Britain's financial watchdog
on Wednesday urged investors who suffered losses from a fund run
by one-time star stock picker Neil Woodford to accept a redress
scheme, or face a costly court battle lasting years.
    Link Fund Solutions, once the authorised corporate director
of the LF Woodford Equity Income Fund, has offered a redress
scheme worth up to 230 million pounds ($279 million).
    The fund was suspended in 2019 after struggling to meet
redemption requests following months of underperformance.
    The sum being offered falls short of what the FCA and
investor groups had wanted.
    "We think it offers the quickest and best chance to obtain a
better outcome that would be available by any other means,"
Therese Chambers, the FCA's joint executive director for
enforcement, told the watchdog's annual meeting.
    "We do encourage investors to consider this proposal
seriously," she said, adding that payments could start in early
2024.
    The FCA is investigating the Woodford debacle and Link has
said it would only accept its findings if the redress scheme
goes through, otherwise they would be challenged, Chambers said.
    "The matter will have to be dealt with by the Upper Tribunal
or via the courts, and any litigation like that is highly
complex, carries a degree of legal risk, takes time and takes
money," Chambers said.
    "There is an uncertain outcome that is potentially a number
of years into the future."
    Link said last month that it had entered into the settlement
on the basis that it did not admit liability and, if the scheme
was unsuccessful, it ​could be many years before the dispute was
resolved​. 
    Chambers said if the redress scheme goes through, the FCA
would then publish the findings of its investigation into the
Woodford fund, known as a final notice.
    "If it does not go through, then we will have to go through
our normal processes in terms of taking formal enforcement
action," she said.

 (Reporting by Huw Jones; Editing by Alex Richardson)
 ((huw.jones@thomsonreuters.com; +44 207 542 3326; Reuters
Messaging: huw.jones.thomsonreuters.com@reuters.net))