Woodford > LF Equity Income Fund > Class actions

Sterlingtimes

There is a number of legal firms recruiting investors in the Woodford LF Equity Income Fund for potential class-actions on no-win no-fees basis.

How would an investor wishing to seek recourse choose from the list of legal firms?

Would each legal firm pursue an individual action or would the cases be co-joined?

Does investor who fails to join the class action miss out on any favourable judgment? 

dunstonh

How would an investor wishing to seek recourse choose from the list of legal firms?

Using the same skill they used in picking to invest in Woodford Income in the first place 

Does investor who fails to join the class action miss out on any favourable judgment? 

No.   However, that is really jumping the gun.  It's not as if the underlying asset and high illiquid assets position was unknown years before the event.  Warnings of the high illiquid asset ratio were present years before it failed.  It was also one of the reasons the other Woodford fund was created (as it didn't have the illiquid assets and you had the choice of the two).

I think the only winners here will be the claims companies and solicitors that rake in the money from investors in litigation and draw their salaries and dividends from that money leaving those investors out of pocket and the original Woodford investors no better off.    A fund failure does not automatically mean compensation.

csgohan4

investments all have a risk, more so in these type of funds. You don't get compensation for taking more risk in order to fuel your goal of higher returns. 

However it's easy in hindsight to spot a bad fund, so not easy at the time

Alexland

csgohan4 said:

investments all have a risk, more so in these type of funds. You don't get compensation for taking more risk in order to fuel your goal of higher returns. 

I have sympathy with Woodford investors who feel the published mandate wasn't being followed, the fund name was misleading and the valuations being reported were unrealistic. This was more than just the failure of active management to achieve good returns. However there was enough information in the public domain before the fund failed that an attentive investor should have been aware of all these issues.

Were these things right? No. Is there liablity? To be determined.

itwasntme001

Can I get compensation even though I sold the fund at a (small) loss before it collapsed?

dunstonh

itwasntme001 said:

Can I get compensation even though I sold the fund at a (small) loss before it collapsed?

I am not sure if you have posted that in irony or are serious.   So, if you posted in irony, then LOL.   If you posted seriously then no you cant.

steampowered

In the UK, you generally have to "opt-in" to litigation like this to benefit from it.

You could consider poking around the different legal firms. But before signing up make sure you read everything very carefully. You don't want to find yourself in a situation where you have to stump up legal costs as a result of participating in the claim (either your own solicitor's legal costs, or if the case is unsuccessful an order to pay fund's legal costs). 

Sterlingtimes

Alexland said:

csgohan4 said:

investments all have a risk, more so in these type of funds. You don't get compensation for taking more risk in order to fuel your goal of higher returns. 

I have sympathy with Woodford investors who feel the published mandate wasn't being followed, the fund name was misleading and the valuations being reported were unrealistic. This was more than just the failure of active management to achieve good returns. However there was enough information in the public domain before the fund failed that an attentive investor should have been aware of all these issues.

Were these things right? No. Is there liablity? To be determined.

Thank you, Alexland. The community here may charge me with having been a "silly billy" in investing in Woodford. I accept that charge but I am now hoping for some recourse. Some would suggest that the investor should take paid financial advice but we see here that advisers have also recommended that investors should consider Woodford. Furthermore, it is not solely the little person who has invested but also larger corporate investors and local councils. Attentive investors may or may not have explored the structural nature of the investment.

For now, I am looking for a little guidance concerning joining a class action.

The only good thing for me is that some of the assets were turned into cash when the FTSE was at a peak and I retained the cash through the tumbling of the market. My real loss is less than it otherwise would have been.

itwasntme001

dunstonh said:

itwasntme001 said:

Can I get compensation even though I sold the fund at a (small) loss before it collapsed?

I am not sure if you have posted that in irony or are serious.   So, if you posted in irony, then LOL.   If you posted seriously then no you cant.

I am being serious.

Alexland

itwasntme001 said:

I am being serious.

While you may feel mislead by the mandate + fund name the asset valuations may have helped support your sale price.

dunstonh

Some would suggest that the investor should take paid financial advice but we see here that advisers have also recommended that investors should consider Woodford. 

Some advisers did although it was heavily used by DIY investors thanks largely to promotions from certain platforms.    You could well have a case to complain to the adviser if you used one as the data was there and some IFA research companies did give out warnings in 2017 about this fund.  Knowing the underlying assets and carrying out due diligence is a requirement of an adviser.

Furthermore, it is not solely the little person who has invested but also larger corporate investors and local councils.

The institutional investors have no excuses.  The should be sacking their advisers and looking to get compensation from them.

Attentive investors may or may not have explored the structural nature of the investment.

If they did and they still decided to invest, then it's their own fault.

If they didn't and invested then it's their own fault.