Unlock the Editor’s Digest without spending a dime
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.
Greater than 5,000 individuals who invested in Neil Woodford’s collapsed fairness fund are suing Hargreaves Lansdown, claiming the UK’s largest funding web site continued to advocate the product even because it bumped into hassle.
Claims agency RGL Administration stated the variety of individuals participating in a group High Court claim towards Hargreaves Lansdown had practically doubled over the previous two years. It added that the common particular person declare, together with curiosity, was about £20,000.
The ultimate variety of claimants is anticipated to be bigger, with RGL planning to file on behalf of extra Hargreaves Lansdown prospects subsequent yr.
Hargreaves Lansdown declined to remark. It beforehand rejected all of the claims made by RGL when it filed for the primary set of claimants in 2022 “for lack of a substantive foundation of declare”.
Hargreaves Lansdown is the UK’s largest vendor of retail funding merchandise and promoted Woodford’s flagship UK Fairness Revenue Fund from when he arrange his personal enterprise in 2014.
Nevertheless, the fund collapsed in 2019 after buyers rushed to attempt to withdraw their cash due to the poor efficiency of its shareholdings and personal firm investments.
The fund was frozen in consequence. Practically 300,000 individuals had invested in it by Hargreaves Lansdown, accounting for £1.6bn of the fund’s total £3.7bn.
RGL stated the declare was for “investor losses sustained on account of Hargreaves Lansdown’s conduct in persevering with to advocate [the fund] proper as much as the day of its extremely publicised collapse, regardless of Hargreaves Lansdown being conscious of the fund’s long-standing portfolio diversification and liquidity points”.
The agency stated claimants have been searching for the return of the cash they misplaced, in addition to damages for the missed alternative of producing returns by investing elsewhere. It’s working with legislation agency Wallace LLP.
RGL stated on its web site that if the declare is profitable, the “quantity to be deducted from gross proceeds . . . by the RGL Group will probably be 25 per cent together with VAT”, noting that this consists of authorized charges amongst different prices.
Michael Inexperienced, director at RGL Administration, stated that “including 1000’s extra claimants . . . represents one other step nearer to holding Hargreaves Lansdown to account for its conduct” in relation to the Woodford Fairness Revenue fund. RGL filed to the Excessive Courtroom on behalf of the brand new claimants on Friday.
Woodford’s fund administrator, Link Fund Solutions, reached a settlement agreement with the Financial Conduct Authority last year over its function within the fund’s collapse.
As a part of the settlement, LFS has supplied redress to affected buyers by a compensation scheme value as much as £230mn. Consequently, LFS averted a £50mn wonderful from the watchdog.
