Hargreaves Lansdown, a major UK investment platform, has been hit by a multimillion-pound lawsuit over the failure of fallen star manager Neil Woodford’s equity fund, which has left hundreds of thousands of investors at losses.
Lawsuit management firm RGL said it filed the lawsuit in London’s High Court on Friday, on behalf of an initial 3,200 investors, against the London blue-chip firm that backed former flagship LF Woodford Equity Income Fund (WEIF).
RGL is also suing Link Fund Solutions (LFS), the fund’s authorized corporate director, and said his lawsuit could exceed £100million (€115million).
“Both institutions have let down WEIF investors,” said Alexander Weinberg, partner at Wallace law firm, which advises RGL.
Hargreaves declined to comment and LFS did not immediately respond to a request for comment over the weekend.
LFS has previously stated that it believes it acted in accordance with applicable rules and in the best interests of all investors and will vigorously defend against claims.
It is the third lawsuit against LFS over the way the fund managed billions of pounds before it was suspended in 2019 amid political and public outcry, trapping 300,000 investors and an investigation into UK Financial Conduct Authority (FCA) triggered.
But RGL is the first to also target Hargreaves for his role in the scandal after Mr Woodford – who has been criticized for holding a large number of hard-to-sell illiquid assets – suspended the fund after months of underperformance Difficulty fulfilling redemption requests.
It was later closed and is being wound up.
Neil Woodford (62) was once one of Britain’s most prominent investors.
RGL claims Hargreaves continued to recommend the WEIF to clients up until the fund’s collapse, despite being aware of liquidity and portfolio diversification issues.
It is also alleged that LFS failed to properly manage and manage the fund.
The FCA is yet to release the full results of its investigation. But it said last month it could fine LFS £50million and order a £306million redress scheme for managing the controversial fund.
The FCA responded to news that Dye and Durham are proposing to acquire LFS and six other companies of Australian share register company Link Group, all of which have been authorized by the UK Financial Conduct Authority.
In early September, Dye & Durham and Link received approval for the acquisition from the Australian Competition Authority, ending a nine-month acquisition saga in which there were multiple bids and competing bidders vying for Link’s stake in online property comparison firm PEXA Group.
Law firms Leigh Day and Harcus Parker have already filed lawsuits against LFS on behalf of approximately 13,000 and 7,000 investors, respectively.
They have expressed hope that they will be appointed joint claims administrators at a court hearing in December.
In June, Harcus Parker filed a lawsuit against LFS in the London High Court on behalf of initially 1,500 investors. They are seeking over £18m in damages from LFS for its handling of Mr Woodford’s defunct equity fund.
https://www.independent.ie/business/irish/investment-platform-hargreaves-lansdown-with-link-to-failed-woodford-equity-fund-hit-with-massive-lawsuit-42070951.html Investment platform Hargreaves Lansdown, linked to failed equity fund Woodford, hit by massive lawsuit