Anyone else taking action against Woodford Equity Income Fund?

eskbanker

dllive said:
Surely he will hang-up his boots and enjoy his many millions on his sterile Cotswold farm; racing his horses and being a gentleman farmer. (Or whatever it is the idol rich do with their time).

Don't think he's much of an idol to anyone anymore....

dllive

Moe_The_Bartender said:

dllive said:

ColdIron said:

It's probably a fruitless endeavour

But would the solicitors bother doing this on NWNF if they didnt think there was a good prospect of success?

Their target is Link for failure to carry out their responsibilities. The argument is that it was their job to ensure, amongst other things, that the fund had sufficient liquidity to meet redemptions and they failed to do that. I doubt that they would go after Woodford personally or Hargreaves Lansdown for promoting the fund when it was clearly in trouble.

Indeed. The solicitors surely think they have a good case against Link.

zagfles

What's to stop someone, rather than agreeing to pay over 30% to some NWNF law firm, just waiting for the result of the legal challenge and if successful, putting in a claim via the FOS for free?

dllive

zagfles said:

What's to stop someone, rather than agreeing to pay over 30% to some NWNF law firm, just waiting for the result of the legal challenge and if successful, putting in a claim via the FOS for free?

Yes. I thought the same thing. Perhaps someone here has the answer.

arnoldy

zagfles said:

What's to stop someone, rather than agreeing to pay over 30% to some NWNF law firm, just waiting for the result of the legal challenge and if successful, putting in a claim via the FOS for free?

Interesting. But it also highlights that the fact that by taking legal action the small investor is doing the FCA's job for them, which is actually quite shameful for FCA, and makes UK financial services and protection look somewhat third worldish.

Its simply not good enough for the FCA to mumble something about interim reports in the next few years, hopefully before the decade is out.

dllive

Hmm, this is potentially a foolish question. Bare with me...

Ive bought and sold in/out of this fund since 2016. Ive just tallied-up all my income and outgoings and all-in-all Ive actually made money. However, Ive had a balance in this fund which I havnt touched since 2018 - before things went belly-up. Since then Ive been blocked from selling, so any income Ive received since than have been the distributions Link made.

So do I still have a claim? 

dunstonh

dllive said:

Hmm, this is potentially a foolish question. Bare with me...

Ive bought and sold in/out of this fund since 2016. Ive just tallied-up all my income and outgoings and all-in-all Ive actually made money. However, Ive had a balance in this fund which I havnt touched since 2018 - before things went belly-up. Since then Ive been blocked from selling, so any income Ive received since than have been the distributions Link made.

So do I still have a claim? 

Claim is the wrong word as no failure resulting in liability has yet to be identified.   As it stands, no you do not.   However, that may or may not change in the future.

dllive

So I shouldn't bother registering with https://www.leighday.co.uk/Product-safety-and-consumer-law/Consumer-law/Woodford-group-claim  ?

dunroving

dllive said:

Hmm, this is potentially a foolish question. Bare with me...

Ive bought and sold in/out of this fund since 2016. Ive just tallied-up all my income and outgoings and all-in-all Ive actually made money. However, Ive had a balance in this fund which I havnt touched since 2018 - before things went belly-up. Since then Ive been blocked from selling, so any income Ive received since than have been the distributions Link made.

So do I still have a claim? 

Coincidentally, I have also just updated my records, having received the latest notification of payouts (the "fourth tranche"). I originally purchased a total of £14,750 in Woodford Equity Income, at between £0.99 and £1.22 per share. I sold out for £10,243 in May 2018, at £1.23 per share, because I read several articles that gave me the willies about this fund going astray from its stated goal. Stupidly, I completely missed the remaining 4,773 shares I had in my ISA (no idea how, but maybe I thought I only had WEI in my SIPP). So, I've been receiving the drip-feed payouts since February 2020, all from the Class C Acc fund. Doh.

All in all, then, the shares I sold were sold at a profit (as all my shares were bought for < £1.23 per share). The shares I am stuck with (nominal "break-even value" of £4,506, or "potential value" of £5,871 if I had sold them when I intended to) have yielded 70p per share (£3,360 total return), with a current remaining book value of £383, totalling "value" since closing the fund of £3,743.

This constitutes a "break-even" loss of £4,506-£3,743 = £763, or a "potential loss" of £5,871-£3,743 = £2,511 (if I had sold up when red alerts were flashing). Either way, these losses (especially the "break-even loss") are not that big a deal in investment circles. I have had close to, or actual, 100% losses in the past (Amerindo - defrauded by the fund founders Alberto Vilar and Gary Tanaka; Marconi - went bust; Lucent - went bust (pretty much); Aberdeen Tech - reduced by 90% in the crash). Some of these were poor investment choices, while others were partly, or wholly, due to deceptive practices and reporting.

Additionally, I invested £11,250 in the Woodford Patient Capital Fund, and sold out for £8,056 at various price points (£1.00, £0.76, and £0.34; current share price is £0.27), therby making a loss of £3,194 on my original investment of £11,250 (so, -28%). If anything, I feel far more "cheated" by the latter fund, but only because a supposedly great fund manager treated it as an experiment, or toy.

bowlhead99

dllive said:

dunstonh said:

dllive said:

Since then Ive been blocked from selling, so any income Ive received since than have been the distributions Link made.

So do I still have a claim? 

Claim is the wrong word as no failure resulting in liability has yet to be identified.   As it stands, no you do not.   However, that may or may not change in the future.

So I shouldn't bother registering with https://www.leighday.co.uk/Product-safety-and-consumer-law/Consumer-law/Woodford-group-claim  ?

dunstonh is correct that as yet there is nothing to 'claim' on, because nobody has been identified to pay out on such 'claims' that people lost money. 

However, Leigh Day among others intend to take Link to court on behalf of some investors, and argue among other things that Link's actions or inactions vs their requirement to follow the prospectus or the FCA sourcebook have ultimately resulted in the investors of the fund (such as yourself in respect of the fund shares you still hold), losing money as a result of the redemption activity which was followed by a liquidation where the fund had to sell the assets for whatever they could get for them and return cash to all investors, rather than being able to continue in business maintaining a portfolio of suitable and allowable investments that could ultimately be sold for a profit or for lower losses.

Leigh Day are happy to argue this because by taking their chances on incurring costs to source aggrieved investors and spending time and effort in court, they and their insurers and financiers could split 30% of any compensation that they successfully obtain for the investors who lost money after holding the fund as it went into liquidation.

As LD intend to arrange for someone other than the investors to bear the costs of their potential failure to win the case (including the exposure to Link claiming their own legal costs to fight it), it seems that the conditional fee arrangement means you only hand over a chunk of your 'winnings' if you win, and don't pay a legal fee if you lose. I have not attempted to sign up for the service, so don't know if the small print means that in the event of failure you are liable for the insurance premium for the insurance they buy on your behalf that would cover Link's costs when Link win. They do explicitly say it would be covered within the 30% of your winnings if they succeed and you get some winnings.

If it's truly 'no win no cost' for an aggrieved investor, rather than simply 'no win no fee' - or any insurance premium costs are nominal - you would not do yourself any financial damage if you sign up to their service and they lose their case (presuming you don't already have a case in with FOS or another law firm in respect of the same shares).