The Financial Conduct Authority (FCA) has fined both Neil Woodford and Woodford Investment Management (WIM) a total £45.9m for failures in their management of the Woodford Equity Income Fund (WEIF).
The regulator has decided to fine Woodford £5.9m and ban him from holding senior manager roles and managing funds for retail investors. The FCA has also handed a fine of £40m to WIM.
WEIF was an investment fund managed by Woodford and WIM, and both were responsible for managing the liquidity of the fund so that investors could redeem their investments and be repaid.
The fund was suspended in June 2019, leaving investors – a significant majority of whom were ordinary retail customers – unable to access their money.
The value of the WEIF had fallen from a high of over £10.1bn in May 2017 to just £3.6bn in the run-up to its suspension.
Following investigation by the FCA, the regulator now considers Woodford’s and WIM’s failings led to a “significantly increased risk” of the fund being suspended.
“Being a leader in financial services comes with responsibilities as well as profile,” said FCA joint executive director of enforcement and market oversight, Steve Smart.
“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 Woodford nor WIM did so, putting at risk the money people had entrusted them with.”
Woodford and WIM have both referred the decision notices to the upper tribunal where each will present their case.
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