Neil Woodford and his investment firm fined almost £46m over fund failings
The Financial Conduct Authority (FCA) has given Woodford a penalty of £5.89m and banned him from holding senior manager roles and managing funds for retail investors and fined Woodford Investment Management (WIM) £40m.
The penalties are for failures in their management of the Woodford Equity Income Fund (WEIF), which collapsed in October 2019 after investors, including many ordinary retail customers, rushed to withdraw money in response to a number of poorly performing company investments, including some hard-to-sell illiquid assets.
The value of the fund fell from a high of more than £10.1bn in May 2017 to £3.6bn in the run-up to its suspension.
The fund was frozen and later closed and wound up. About 300,000 people had invested in the fund, including 130,000 through the investment platform Hargreaves Lansdown, which is being sued by thousands of investors.
The FCA's ruling is only provisional, as Woodford and WIM have referred the decision notices to the upper tribunal where each will present their case.
The City watchdog concluded that between July 2018 and June 2019 Woodford and his company made 'unreasonable and inappropriate investment decisions', having disproportionately sold more liquid investments – which are easier to sell – and bought less liquid ones over this period.
This meant that at the time of suspension only 8% of the investments held by WEIF could be sold within seven days, the FCA said. Under rules in place at the time, investors should have been able to access their funds within four days.
WIM and Woodford 'did not react appropriately' as the fund's value declined, its liquidity worsened and more investors withdrew their money, the regulator said.
In its ruling, the FCA said Woodford 'held a defective and unreasonably narrow understanding of his responsibilities'.
Sign up to Business Today
Get set for the working day – we'll point you to all the business news and analysis you need every morning
after newsletter promotion
Steve Smart, a joint executive director of enforcement and market oversight at the FCA, said: 'Being a leader in financial services comes with responsibilities as well as profile. Mr Woodford simply doesn't accept he had any role in managing the liquidity of the fund.
'The very minimum investors should expect is those managing their money make sensible decisions and take their senior role seriously. Neither Neil Woodford nor Woodford Investment Management did so, putting at risk the money people had entrusted them with.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
12 minutes ago
- The Sun
Urgent warning issued over ‘very convincing' web scams as shoppers conned out of £100s
SHOPPERS have been warned to look out for "very convincing" web scams that are conning people out of hundreds of pounds. There has been a recent rise in criminals creating fake websites for well-known brands, experts say, and many scammers are using AI to help them. 1 Costco is one of the retailers that has recently been targeted by these criminals, with the wholesale business warning customers to be vigilant when shopping online. Dozens of reviews have appeared on Trustpilot in recent weeks from Costco shoppers who paid for orders but never received them, with some claiming to have bought items costing hundreds of pounds. Costco responded to several customers on the review site, writing: "We were unable to locate an order with the details provided and suspect that the purchase may have been made through a fraudulent website posing as Costco. "Unfortunately, there has been a recent increase in fraudulent websites impersonating Costco." In another Trustpilot response to a customer who had fallen for the scam, it urged shoppers to "check the URL which is displayed when shopping online". It added: "Our site displays at the beginning of the web address." Some Costco shoppers may have lost hundreds of pounds to the scam. In one review, a customer claims they bought a Bosch router table, which are on sale for up to £500 from some online retailers, but had not received it. Costco responded saying their order could not be found and it was likely bought through a fake website. Another customer said they ordered a keter Manor outdoor shed, which retails for over £200 on the high street, and were told by Costco they had likely been scammed. Avoid being ripped off by car hire companies with these four top tips It's not just Costco that has been targeted by fake websites - experts told The Sun that the scam is on the rise. 'Criminals are increasingly creating convincing looking websites that mimic well known retailer that lure shoppers in with seemingly genuine branding and tempting offers," said Jake Moore, global security adviser at ESET. "These sites often harvest lots of personal and payment information or take money without delivering goods." He said they're also becoming "incredibly easy to make" with the use of AI, as it means scammers no longer need to know how to code to create fake websites. "The end results are often near perfect copies too," he said. Starling Bank financial crime specialist Sarah Lenette adds: With the rise of AI, scammers have everything they need to create very convincing retail sites in very little time, which include all of the correct branding, products and relevant offers and deals." One common way you can end up on a fake website is by clicking on a fake ad on social media platforms like Facebook, TikTok or Instagram. "Users then unknowingly find themselves on a site believing they are on the legitimate retailer," Jake says. It comes after a raft of fake Wilko websites offering huge discounts were set up by scammers after the retailer fell into administration in 2023. Cath Kidston and Joules have also been targeted by the scams. How to spot a fake website While scammers have become more sophisticated, there are several ways you can keep an eye out for fake websites when shopping online. Which? Consumer Expert Rob Lilley-Jones says you should avoid any deals that seem "too good to be true" - as they usually are. "Another tell-tale sign of a scam website will be poor spelling and bad grammar," he adds. Look out for any websites that don't have a physical address and a phone number and email address to contact them. "If they don't, it's a red flag," Rob says. He also suggests using a domain checker like to see when the website was set up. "If it's recent, and the company claims to be a well-known one like Costco, it's a scam," he says. Sarah Lenette adds that you should be wary of any URLs for UK retailers that end in .org or .net. You should also avoid clicking on social media ads that you're unsure about, she says. "Always search for the retailer on a search engine and head to them independently, as well as checking for independent reviews on sites such as TrustPilot," she says. Costco was contacted by The Sun but declined to comment.
BBC News
12 minutes ago
- BBC News
Spending by promoted clubs set to surpass £300m
Once defender Omar Alderete's transfer from Getafe to Sunderland is completed, it will take spending by the three newly promoted clubs to over £300m this Alderete, the Black Cats have paid out an estimated £122m on 10 players. Burnley have brought in 13 new faces at a cost of approximately £100m, while Leeds United have invested £73.5m on seven is little doubt that consolidating top-flight status is harder than ever, with the gulf between the Championship and Premier League continuing to widen. In each of the previous two seasons, the three sides that came up went straight back a consequence, clubs are spending ever increasing sums in the hope of remaining competitive, but with no guarantee it will pay Ipswich Town and Leicester City shelled out a total of £276.5m last summer but together they accumulated just 59 points, the lowest combined figure by newly promoted teams in a 38-game Premier League season.
Telegraph
12 minutes ago
- Telegraph
Minister vows to fix broken nuclear regulation
Ministers have vowed to speed up crucial nuclear projects as part of a plan to transform Britain into a green energy superpower. A new independent taskforce commissioned by the Government called for a 'radical reset' of nuclear regulations this week, taking aim at the current system which it said was 'unnecessarily slow, inefficient and costly'. In its first report, the taskforce said overly complex and expensive red tape was holding up crucial infrastructure projects and increasing the cost of the UK's nuclear deterrent. John Fingleton, the former head of the Office of Fair Trading who is leading the taskforce, said: 'Nuclear energy is safe and reliable and can contribute to net zero goals. It is also vital to the UK's strategic deterrent. 'However, over recent decades, nuclear regulation has become more complex and costly without always delivering commensurate safety and environmental benefits.' He said the current system was 'not fit for purpose'. Miatta Fahnbulleh, the minister for energy consumers, said: 'For too long, big British infrastructure projects have been held back by needless bureaucracy. 'It's time for a new approach to getting nuclear projects off the ground more quickly, and at a lower cost. 'We look forward to working with the expert taskforce to modernise outdated regulations so we can unlock growth, jobs and energy security for the British people.' It comes after ministers were forced to admit that the Sizewell C nuclear power plant could end up costing £48bn to build – £10bn more than they estimated when final approval was given last month. The cost of the new plant in Suffolk had already more than doubled from about £16bn in 2016. Meanwhile, a sister project at Hinkley Point C in Somerset is six years late and £28bn over budget. Ed Miliband, the Energy Secretary, recently heralded a new 'golden age' of nuclear amid concerns that the rapid shift to wind and solar has left Britain exposed to blackouts. However, the ballooning cost of nuclear projects has fuelled concerns about rising energy bills for consumers. A new levy to help fund Sizewell C is due to kick in this autumn, adding an average of £12 per year to household bills. In its report, the taskforce attacked 'risk-averse cultures that prioritise bureaucracy over proportionate safety measures', which it said led to higher costs and delayed projects. It also criticised complex and inconsistent rules, with processes often duplicated across overlapping regulators, as well as outdated planning rules. The Government said it would work with the taskforce to develop a new strategic direction for the nuclear industry to ensure projects are completed quickly and safely. A final report and recommendation will be published in the autumn. Mike Finnerty, the chief executive of the Office for Nuclear Regulation, said: 'Our discussions with the taskforce have been extremely productive. We will continue to work with the team, providing further requested regulatory expertise, to help inform the final report in a way that supports innovation.'
