Woodford Group Action

JohnWinder

dunstonh said:

Why do you think losses should be recovered? 
I know there is a bandwagon of firms trying it and it is possible they could succeed.  Hopefully, they won't ....

'I think there were multiple failings on Link’s part. Link was supposed to inform the FCA about what was going on and to warn investors about problems within the fund; it did neither.'

https://www.evidenceinvestor.com/links-role-in-woodford-fiasco-laid-bare-in-new-book/

'But the FCA certainly gave the impression that they failed to act on some of the red flags as soon as they should have done.

As authorised corporate director, Link Fund Solutions had a responsibility to investors to ensure their money was being sensibly invested and that they could take their money out if they wanted to. It appears that Link failed investors on both of those counts.'

https://www.evidenceinvestor.com/could-the-woodford-blow-up-have-been-prevented/

'The Equitable Life Payment Scheme (the scheme) was set up by government to make payments to Equitable Life policyholders in respect of relative loss they suffered on their investments following government maladministration in the regulatory returns of the Equitable Life Assurance Society between 1992-2000.'

https://www.gov.uk/guidance/equitable-life-payment-scheme

Malthusian

Nobody will shed any tears if Crapita (aka Link) have to shell out, but the signs are not promising. They made a very similar dereliction of duty over the Connaught fund and only had to shell out a few peanuts and a card saying "sorry for your loss lol" out of petty cash. Most of the losses were dumped on the advice sector and the general public via the FSCS.

Equitable Life was a case of "if enough people believe an investment is risk-free the government has to spend everyone else's money to make it so". Equitable Life was offering guarantees that it couldn't back (and the regulators just let them get on with it). Woodford wasn't offering any guarantees and no-one thought it was risk-free, they just weren't prepared for the risk associated with investing in unlisted companies and cold fusion scams (even though Woodford was very open that that was what he was doing).

The question is whether the losses can be pinned on negligence by Crapita or Hardcheese Pantsdown instead of investment performance, not whether the punters shouldn't have been exposed to loss at all.

lozzy1965

Malthusian said:

 Crapita or Hardcheese Pantsdown instead of investment performance, not whether the punters shouldn't have been exposed to loss at all.

Thanks.  You've made my morning

[Deleted User]

Some commentators imply that Link was accepted by Woodford because the company was known to be a complaisant ACD, over which Woodford's practices could ride easy.  

Woodford and Hargreaves Lansdown met on more than thirty occasions after the platform included his Equity Income fund on its buy list. Dampier was the fall guy but it seems unlikely that Hargreaves and Lansdown weren't in the room with them. In Novemver 2017 HL raised concerns about Woodford breaching EU limits in unquoted companies. Woodford decided to list some of his unquoted holdings on the International Stock Exchange (TISE) in Guernsey, a tiny bourse which counts Stephen Lansdown
as one of its major shareholders. Lansdown was deputy chairman of the exchange until 2017. 

Hargreaves Lansdown continued to promote Woodford funds on its buy list until the music stopped. 

talexuser

I don't think many on this board would disagree with any or at least most of that, but it's still a long way from a legal case to be proven in court against as negligence.
Many many years ago I was in a top performing European fund recommended in all the money sections (before the internet) which did very well before losing half its value due to ACTUAL proven fraud (interestingly also with unlisted companies as a problem, just illegally hidden, unlike Woodford). Just taken over by another firm, the name eventually disappeared as if nothing happened, and nobody got any money back. The manager appeared in court some years later in womens' clothes with a gone ga-ga defense and got away with it. Again that was actual proven multi million pound fraud. Nothing changes.

talexuser

Today's update:
The Financial Conduct Authority has told MPs it was unable to give them a timeline as to when its investigations of the Woodford debacle would be finished. It has SO FAR interviewed FOURTEEN witnesses. And perhaps, maybe, with a bit of luck at the end of this year it will be in a position to move forward to deciding the "is there a case to answer" stage! Wow, what spectacular progress after only  two years from starting the investigation. With a bit of luck all the players will be dead, or at the very least retired safely abroad by the time the farce is finished.

bostonerimus

talexuser said:

Today's update:
The Financial Conduct Authority has told MPs it was unable to give them a timeline as to when its investigations of the Woodford debacle would be finished. It has SO FAR interviewed FOURTEEN witnesses. And perhaps, maybe, with a bit of luck at the end of this year it will be in a position to move forward to deciding the "is there a case to answer" stage! Wow, what spectacular progress after only  two years from starting the investigation. With a bit of luck all the players will be dead, or at the very least retired safely abroad by the time the farce is finished.

Indicting Woodford would be, to a greater or lesser extent, indicting large parts of the financial industry...so there are too many vested interests at stake for anything meaningful to happen.
Does it stink...yes. Was anything illegal...probably not. Were lots of people taken in by a lot of hype...yes. Caveat Emptor.