Financial Regulator Fines Woodford Investment Management Heavily
The Financial Conduct Authority (FCA) has set up a £230 million redress scheme for investors stuck in the Woodford Equity Income Fund (WEIF) when it was suspended in June 2019. This redress scheme is intended to compensate investors who were unable to access their funds during the suspension. However, the FCA's enforcement against Neil Woodford and Woodford Investment Management (WIM) is currently under challenge in the Upper Tribunal.
The FCA's decision to fine Neil Woodford £5,888,800 and WIM £40,000,000, and to impose a ban on Woodford from senior manager roles and managing retail funds, is being appealed by both parties. The appeal is set to proceed before the Upper Tribunal, where both the factual and legal arguments will be vigorously contested.
The FCA alleges that between July 2018 and June 2019, the fund’s liquidity was mismanaged. A disproportionate sale of liquid assets and purchase of illiquid ones left only 8% of investments sellable within 7 days, whereas rules then required access within 4 days. The FCA contends that Woodford should have personally supervised the management of the fund's liquidity, a claim that Woodford disputes.
Woodford argues that the authorised corporate director (ACD), Link, had responsibility for monitoring liquidity. This disagreement over roles is central to the legal challenge. The appeal process at the Upper Tribunal may take several years due to case backlogs, with no hearing date assigned as of August 2025. Until the Tribunal decision, the FCA’s fines and bans are provisional and do not take effect.
The redress scheme does not address the reasons for the suspension of the WEIF or the actions leading up to it. It is also separate from the ongoing regulatory actions against Link, Neil Woodford, and Woodford Investment Management. The current status of the Upper Tribunal case is that both parties have formally appealed the FCA’s decision, and the case is awaiting its next legal phase. The Tribunal’s ruling could have significant implications for regulatory accountability in fund management.
[1] Financial Times. (2021, March 10). Woodford appeal to go ahead despite FCA's concerns over fairness. Retrieved from https://www.ft.com/content/1444a1c4-703d-4718-845c-e66f0b6668b4
[2] The Guardian. (2021, March 11). Neil Woodford's appeal against FCA ban to go ahead despite concerns over fairness. Retrieved from https://www.theguardian.com/business/2021/mar/11/neil-woodford-appeal-against-fca-ban-to-go-ahead-despite-concerns-over-fairness
[3] Financial Conduct Authority. (2020, December 17). FCA fines Neil Woodford and Woodford Investment Management for mismanagement of the Woodford Equity Income Fund. Retrieved from https://www.fca.org.uk/news/press-releases/fca-fines-neil-woodford-and-woodford-investment-management-mismanagement-woodford-equity-income-fund
[4] Financial Conduct Authority. (2020, December 17). Neil Woodford and Woodford Investment Management Ltd: Decision notice. Retrieved from https://www.fca.org.uk/publication/decisions/woodford-investment-management-ltd-decision-notice.pdf
- The Financial Conduct Authority (FCA) has fined Neil Woodford and Woodford Investment Management (WIM) for the mismanagement of the Woodford Equity Income Fund's (WEIF) liquidity, and imposed a ban on Woodford from senior manager roles and managing retail funds. However, both parties have appealed the decision to the Upper Tribunal.
- The redress scheme set up by the FCA for investors stuck in the WEIF does not address the reasons for the fund's suspension or the actions leading up to it. It is also separate from the ongoing regulatory actions against Link, Neil Woodford, and Woodford Investment Management.
- Woodford argues that the authorised corporate director (ACD), Link, had responsibility for monitoring liquidity, disagreeing with the FCA's contention that Woodford should have personally supervised the management of the fund's liquidity. This disagreement over roles is central to the legal challenge in the Upper Tribunal.
