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Greater than 5,000 individuals who invested in Neil Woodford’s collapsed fairness fund are suing Hargreaves Lansdown, claiming the UK’s largest funding web site continued to advocate the product even because it bumped into hassle.
Claims agency RGL Administration mentioned the variety of individuals participating in a group High Court claim in opposition to Hargreaves Lansdown had almost doubled over the previous two years. It added that the common particular person declare, together with curiosity, was about £20,000.
The ultimate variety of claimants is anticipated to be bigger, with RGL planning to file on behalf of extra Hargreaves Lansdown clients subsequent yr.
Hargreaves Lansdown declined to remark. It beforehand rejected all of the claims made by RGL when it filed for the primary set of claimants in 2022 “for lack of a substantive foundation of declare”.
Hargreaves Lansdown is the UK’s largest vendor of retail funding merchandise and promoted Woodford’s flagship UK Fairness Revenue Fund from when he arrange his personal enterprise in 2014.
Nonetheless, the fund collapsed in 2019 after traders rushed to attempt to withdraw their cash due to the poor efficiency of its shareholdings and personal firm investments.
The fund was frozen consequently. Practically 300,000 individuals had invested in it by Hargreaves Lansdown, accounting for £1.6bn of the fund’s total £3.7bn.
RGL mentioned the declare was for “investor losses sustained on account of Hargreaves Lansdown’s conduct in persevering with to advocate [the fund] proper as much as the day of its extremely publicised collapse, regardless of Hargreaves Lansdown being conscious of the fund’s long-standing portfolio diversification and liquidity points”.
The agency mentioned claimants had been in search of the return of the cash they misplaced, in addition to damages for the missed alternative of producing returns by investing elsewhere. It’s working with legislation agency Wallace LLP.
RGL mentioned on its web site that if the declare is profitable, the “quantity to be deducted from gross proceeds . . . by the RGL Group will likely be 25 per cent together with VAT”, noting that this contains authorized charges amongst different prices.
Michael Inexperienced, director at RGL Administration, mentioned that “including 1000’s extra claimants . . . represents one other step nearer to holding Hargreaves Lansdown to account for its conduct” in relation to the Woodford Fairness Revenue fund. RGL filed to the Excessive Courtroom on behalf of the brand new claimants on Friday.
Woodford’s fund administrator, Link Fund Solutions, reached a settlement agreement with the Financial Conduct Authority last year over its position within the fund’s collapse.
As a part of the settlement, LFS has supplied redress to affected traders by a compensation scheme value as much as £230mn. In consequence, LFS prevented a £50mn high-quality from the watchdog.
