Woodford compensation law firm slams FCA’s £306m pay-out estimate and claims figure ‘could be in the billions’ through the courts

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  • The financial regulator has said Link Group is on the hook because of its £306m damages plan.
  • Li Day: If all investors joined the group, the amount of the court order would be higher
  • Link Group denies any violation of city rules and plans to defend itself

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The law firm representing investors in the failed Woodford Equity Income Fund has criticized the financial watchdog for its £306m damages plan.

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Contributors lost more than £1bn when Neil Woodford’s flagship fund collapsed in 2019 and the Financial Conduct Authority said yesterday that the fund’s administrator, Link Group, which made the decision to put the fund on hold pending its eventual collapse, could be liable to compensate Woodford investors. .

But Li Day said Tuesday that the law firm’s own calculations suggest that if thousands of affected investors sign up for a class action lawsuit, “lawsuits could run into the billions.”

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Link denies any violation of city rules and plans to defend himself in the lawsuit.

Losses: The Woodford Equity Income Fund was frozen after a flood of investors tried to withdraw their money due to the poor performance of manager Neil Woodford (pictured)

The FCA is investigating the circumstances leading to the fund’s collapse and has now confirmed that it “probably will attempt to require Link to pay a financial penalty and/or consumer damages.”

He added that Link’s account was set at £306m as it “reflects the FCA’s current view of Link’s shortcomings in managing the liquidity of the Woodford Equity Revenue Fund”.

However, several parties are reportedly under the FCA’s microscope for possible wrongdoing, and therefore the total amount of compensation paid to investors as a result of regulatory intervention could be much higher.

But Meriel Hodgson-Teal, a lawyer at Leigh Day, dismissed the figure attributed to Link’s failures as “insufficient to compensate for the many thousands of people who have suffered huge and life-changing financial losses by investing in this fund.”

She added, “Lee Day calculated that if all the individuals who suffered losses as a result of investing in this fund signed up for lawsuits, lawsuits could amount to billions.”

Li Day has been recruiting applicants for a class order for some time, which is currently scheduled for December this year.

Canadian software company Dye & Durham plans to buy Link for £2.1bn.

D&D said it received a warning from the FCA saying the city’s regulator would not approve the takeover unless D&D promised to cover any “damages and/or damages” Link was ordered to pay.

Hodgson-Teal said: “It’s amazing that she filed a takeover bid for Link Group for FCA to show that she believes Link has indeed breached its obligations to the Woodford Equity Income Fund.”

The FCA, which was run by current Bank of England Governor Andrew Bailey at the time of the fund’s collapse, has been criticized for its handling of the scandal.

However, critics have pointed to more than just broader issues and conflicts of interest in the asset management industry.

Neil Woodford was once arguably the most famous fund manager in the UK, amassing huge amounts of investor money in his sole proprietorship following a successful career at Invesco. The 62-year-old man is also considered the subject of an FCA investigation.

Hodgson-Teal said: “What’s unclear is how the FCA will impose a fine or require a damages scheme to compensate investors, and when that will actually happen.” It may be many months, if not years, before a redress scheme is developed.

“If there was an indemnity scheme, it would be separate from the claims that are pending in the courts, including those brought by Li Day on behalf of our clients.

“Leigh Day continues to work on a lawsuit that seeks to fully compensate investors for the losses incurred.”

Credit: www.dailymail.co.uk /

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