The Financial Conduct Authority issued Decision Notices setting out its decision to fine Neil Woodford GBP 5,888,800 and Woodford Investment Management Limited (WIM) GBP 40,000,000 for failures in their management of the Woodford Equity Income Fund (WEIF), and to ban Woodford from holding senior manager roles and managing funds for retail investors. Woodford and WIM have referred the Decision Notices to the Upper Tribunal, meaning the findings are provisional. The FCA concluded that between July 2018 and June 2019 Woodford and WIM made unreasonable and inappropriate investment decisions that worsened WEIF’s liquidity, including disproportionately selling more liquid holdings while buying less liquid ones. It found that by the time WEIF was suspended in June 2019 only 8% of the portfolio could be sold within seven days, while the rules in place at the time indicated investors should have been able to access their money within four days; the fund’s value had fallen from over GBP 10.1bn in May 2017 to GBP 3.6bn ahead of suspension. The regulator also found they did not react appropriately as the fund’s value declined and redemptions increased, disadvantaging investors who remained in the fund, and that Woodford had a defective and unreasonably narrow understanding of his responsibilities, including failing to provide proper oversight of WIM’s relationship with Link Fund Solutions, WEIF’s authorised corporate director. The FCA noted it has previously published findings against Link, including securing a GBP 230m redress scheme for investors who were stuck in the fund when it was suspended.

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