Woodford investors considering legal action
Lawyers at Leigh Day are investigating what Hargreaves Lansdown knew about the health of the Woodford Equity Income fund whilst it continued to support it in its Top 50 list of funds through the platform.
The fund was suspended in June following a spike in withdrawal requests. Link Fund Solutions, which administers the fund, announced this week that the fund was to be wound up. Fund manager Neil Woodford subsequently announced the closure of Woodford Investment Management.
Reports in the Financial Times claim Hargreaves Lansdown had been in talks with Woodford over the poor liquidity of his funds since 2017. But despite the talks, Hargreaves still included the Woodford Equity Income in its Wealth 50 list in January 2019.
The list is marketed by the company as “what we believe to be the best funds across all the major sectors for new investment”.
Boz Michalowska, head of the consumer law team at Leigh Day, is leading the potential claims. She said the firm had already been contacted by potential clients keen to pursue legal action against the trading platform.
Michalowska said: “We have been approached by a number of individuals who are keen for us to investigate whether Hargreaves Lansdown and Woodford became too closely interlinked. We will be looking into whether Hargreaves Lansdown misrepresented the health of the Woodford Equity Income Fund resulting in potentially significant losses for their clients.”
Hargreaves Lansdown said in a statement: “As with all HL plc share sales made by directors, trades were approved ahead of the transaction and there is a clear public record. The timing of these share sales and the gating of WEIF was entirely coincidental.”