Nelsons has become the first law firm to announce it is examining possible legal claims against Woodford Equity Income authorised corporate director Link Fund Solutions.
Hargreaves Lansdown has been the focus of four legal investigations already seeking to establish whether a case can be made against the D2C platform for championing Neil Woodford’s fund despite being aware of liquidity problems. Leigh Day alone is working with 3,000 claimants on a case against the Bristol-based company.
Nelsons, which is based in Nottingham, Leicester and Derby, is already investigating Hargreaves, having already received 300 enquiries from investors, but it is now extending its investigation to Link.
This week represents one-year since the Woodford Equity Income suspended after £560m worth of redemptions over a four-week period exasperated existing liquidity problems in the fund due to its exposure to unquoted and illiquid companies.
The Financial Conduct Authority has been criticised for its lack of action to date.
Nelsons partner Cathryn Selby (pictured), who specialises in professional negligence claims, said: “Over the past six months, we’ve been supporting clients who are considering legal action against Hargreaves Lansdown for its promotion of the Woodford Equity Income Fund. During this time, we’ve become more aware of Link Fund Solutions’ apparent failure to address at a much earlier stage the substantive issue of the increasing illiquidity of the fund.
“This will have affected anyone who invested in the fund, particularly those who did so after December 2017 as they may well say their losses could have been avoided had Link Fund Solutions done its job properly.”
See also: One year on: A month-by-month look at the Woodford fund suspension so far
Selby added: “As the authorised corporate director, Link Fund Solutions had a fiduciary role and a regulatory obligation to ensure that the Woodford Equity Income Fund was run in the best interests of investors, ensuring they were protected and treated fairly.
“It was required to adhere to the Financial Conduct Authority’s (FCA) Principles of Business, and the rules set out in the collective investments schemes sourcebook of the FCA handbook.
“Events leading up to the suspension of the Woodford Equity Income Fund revealed that a number of unquoted companies in the portfolio had been listed on The International Stock Exchange in Guernsey – allowing Neil Woodford to maintain a heavy weighting to unquoted companies far in excess of the 10% dictated by fund rules.
“Link Fund Solutions was involved in the decision to designate The International Stock Exchange as an eligible market for these purposes, which allowed the initial listings of the shares to take place.
“We are looking at whether such decisions were indeed in the best interests of all investors, or whether it could be said that investors were let down by Link Fund Solutions’ apparent failure to address the substantive issue of the increasing illiquidity of the fund at a much earlier stage.”
Link did not wish to comment on the investigation.
See also: ‘What have people learned? Damn little’: Seven investors on Woodford one year on
