Findings published by the FCA have revealed that Link Fund Solutions (LFS) didn’t manage the Woodford Equity Income Fund (WEIF) with due skill, care, and diligence.
Link Funds Solutions’ Failures Listed By The FCA
The investigation covered the period between 31 July 2018 and 3 June 2019, which was the period when the fund was suspended due to liquidity issues. During that time, LFS didn’t manage the liquidity of the fund. This is necessary so that investments can be turned into cash and investors can access their funds quickly.
The FCA also found that LFS didn’t oversee Woodford Investment Management (WIM) properly and did not act sufficiently on the liquidity concerns. A separate action carried out by the FCA has seen it send warning notices to Neil Woodford and WIM, suggesting that it may take action against them due to the way that they managed the WEIF.
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Theresa Chambers, LinkedIn
These warning notices to WIM and Woodford aren’t definitive yet, and both parties can make their case to the Regulatory Decisions Committee. However, for the moment, the FCA’s warning notice statement against Woodford alleges that he had an unreasonably narrow and defective understanding of his responsibilities in terms of managing liquidity issues.
Therese Chambers, the joint executive director of enforcement and market oversight at the FCA, said:
Their failings led to losses for those trapped in the fund when it was suspended.
Public findings will be revealed at a later stage, together with details of any proposed sanctions. Investors in the WEIF are now receiving funds from the £230m redress scheme, which the High Court approved in February. No other individuals or companies are being investigated by the FCA regarding the WEIF.
