Hargreaves Lansdown was sued by thousands of investors in a multimillion-pound suit for his promotion of Neil Woodford’s equity income fund.
RGL, a claims management company, filed the suit in London’s High Court for 3,200 investors. It claimed that this number is growing every day.
Hargreaves was accused of continuing to promote the star fund manager’s LF Woodford Equity Income Fund, (WEIF), until its collapse. RGL claims that it did this despite being aware of its problems since 2017.
Investors lost billions when the £3.7bn fund closed in 2019 after it failed to fulfil redemption requests.
Hargreaves Lansdown is the first to be sued in the lawsuit. Both companies have denied the allegations.
Alexander Weinberg, the partner in the law firm Wallace, was instructed by RGL to represent the claimants. He stated: “Both institutions failed WEIF investors, though in different ways and each has a compelling case to answer.”
“The RGL Group believes that Hargreaves Lansdown, as well as Link, must be held responsible for their respective failures. Both defendants will be vigorously pursued to this end.”
RGL believes the claim could be worth more than PS100m. RGL estimates that around 300,000 investors invested in the fund at the time it was iced in 2019.
Chris Hill, chief executive at Hargreaves, stated that the company had observed an increase in “small and unquoted assets in the Woodford Equity Income Fund in November 2017 in a letter addressed to the Treasury Select Committee.
The fund was invested in by approximately 130,000 Hargreaves Lansdown customers.
Neil Woodford, before the scandal, was one of the UK’s most closely monitored stockpickers. He avoided the worst losses due to the dot-com bubble or the financial crisis.
Since October 2019, the fund is in the process to be wound up.
Link was the fund’s authorised corporate director, meaning that it was responsible for managing the fund and making sure it “operated according to how it was promoted to investors”, according to the lawsuit.
Link has been ordered by the Financial Conduct Authority to pay more than £300m in compensation and penalties.
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