Two years after the collapse of Neil Woodford's Equity Income fund, and with 300,000 investors still awaiting answers from the regulator despite being set to lose £1bn from its liquidation, industry commentators are calling for a solution to be found sooner rather than later in order to reinstate the public's faith in financial services.
The Financial Conduct Authority (FCA) launched an enforcement probe in June 2019, but it recently admitted to the Treasury Select Committee this was unlikely to conclude until the end of this year, with no "precise timeline" for its outcome. Campaigner Gina Miller slammed the FCA's credibility as a fit-for-purpose regulator, calling for the watchdog to finish the statutory inquiry as soon as possible and then launch an independent investigation of its own regulatory "failures".
The update from the FCA to the Treasury Select Committee indicates their investigation is likely to take three years to complete and, according to campaigners, does not cover its own regulatory role in this scandal, or that of Hargreaves Lansdown. According to the True and Fair Campaign, the last time the FCA made any referral to Woodford in its board minutes was October 2019. The FCA investigation is focused on the behaviour of Woodford and Link Fund Solutions, and whether they acted in the interests of all its investors by reducing the liquidity of the fund.
Leigh Day, one of the law firms representing investors in the former fund, said that the FCA does not operate to the strict deadlines imposed by a court timetable in a litigated case, making it possible that a court judgment may be obtained before the FCA finally concludes its investigation. But it noted that as the investigation drags on, investors are suffering.
About the Author: Glen Callow
