The Daily Telegraph
Link faces £50m fine over Woodford fund collapse
THE administrator of Neil Woodford’s collapsed income fund faces a £50m penalty on top of £306m in redress payments for its role in the fiasco, regulators have announced.
The Financial Conduct Authority (FCA) confirmed that it had issued Link Fund Solutions with a draft warning notice of the fine for its role overseeing the collapsed Woodford Equity Income Fund.
Link was the authorised corporate director of the Woodford Equity Income Fund, which meant it had a duty to monitor the fund and hold the fund manager to account.
Mr Woodford’s fund was suspended and eventually shut down in 2019, after the former star stock picker was unable to sell assets quickly enough to meet mounting withdrawals.
More than 300,000 investors were left with heavy losses.
Last week, the FCA said it had determined Link was liable for £306m in compensation to investors. The £50m fine, which was first publicly disclosed through a filing with the Australian Securities Exchange, comes on top of the likely redress payments.
“Link will now have 14 days to respond to the notice,” said the FCA, adding that the group will have an opportunity to challenge the regulator’s findings and the penalty. The draft warning notice is not the final decision. Link was contacted for comment.
The FCA said: “There are multiple parties under investigation in relation to the circumstances that led to the suspension of the [fund]. These investigations continue and they will consider any further failings which may have negatively impacted investors.”
The £306m redress figure represents the FCA’S current view of Link’s failing in managing the liquidity of the fund.
“Fca-determined redress is based on misconduct rather than losses caused by fluctuations,” the watchdog said.
Link Fund Solutions’ parent, Sydneybased Link Group, is the subject of a $1.7bn (£1.5bn) takeover bid by Torontobased Dye & Durham. The FCA has the power to block such a deal, and has pledged to do so if D&D does not make funds available to cover redress payments to those affected by the collapse.