Woodford Investment Management  

MPs call for 'swift' conclusion to FCA Woodford investigation

MPs call for 'swift' conclusion to FCA Woodford investigation

The chairman of the treasury committee has urged the Financial Conduct Authority to conclude its investigation into the Woodford Equity Income scandal as quickly as possible.

In a letter to FCA chief executive Nikhil Rathi sent today (January 10), Mel Stride MP told the watchdog chief the investigation remained “a matter of keen interest to the committee”.

He added he expects the FCA to ensure its probe is well resourced and that the regulator takes every opportunity to update the committee as the investigation progresses.

Stride wrote: “The collapse of the Woodford Fund led to significant losses for many retail investors. The FCA’s investigation is set to move into a new phase, and I have today written to the FCA to urge them to allocate the resources required to enable as swift a conclusion to their investigation as possible.”        

In May Rathi told the committee he was confident the investigative work itself would be completed by the end of 2021 but added the FCA's report into the suspension of the LF Woodford Equity Income Fund was unlikely to be published before the end of the year.

Stride’s letter today was in response to one sent by Rathi on December 15 which had updated the committee on its investigation.

Rathi outlined that the regulator had gathered all key evidence required, and was finalising its legal analysis with a view to making a decision on whether to take action, and if so, against whom.

“We recognise the importance of these decisions and it is important to ensure they are made properly,” he said.

Rathi added if the FCA did decide to take disciplinary action, the details of the allegations and individuals involved would not be disclosed until certain stages of the process have been completed. 

“We are conscious of the public interest in this matter and it remains a priority for the FCA," he added.

The investigation into the fund included interviews of several key witnesses, the issuance of over 30 information requirements and the gathering of over 20,000 items of relevant material from all the key parties.

Meanwhile at the end of last year law firm Leigh Day began court proceedings against Link Fund Solutions over its handling of the Woodford Fund on behalf of investors.

Link was the authorised corporate director of the fund.

The fund had been struggling with outflows which were running at a net £9m per working day in May 2019.

On June 3 that year Kent County Council asked to withdraw all of the £250m it had invested with the manager through its pension fund. This helped trigger the fund's suspension.

Woodford tried to sell shares to shore up the fund’s liquidity in case of a wave of redemptions when the fund re-opened, however on October 15 Link announced the fund would be wound down and the former star manager fired.

sally.hickey@ft.com