Neil Woodford and Firm Hit with £46m Fine Over Fund Collapse
Published 5 August 2025
Highlights
- Neil Woodford and his firm face nearly £46m in fines from the Financial Conduct Authority (FCA) over fund mismanagement.
- The Woodford Equity Income Fund collapsed in 2019, affecting 300,000 investors, due to poor liquidity management.
- The FCA has banned Woodford from senior management roles and managing funds for retail investors.
- Woodford Investment Management (WIM) plans to appeal the FCA's decision, disputing the findings.
- The fund's value plummeted from £10.1bn in 2017 to £3.6bn before its suspension in 2019.
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Rewritten Article
Headline: Neil Woodford and Firm Hit with £46m Fine Over Fund Collapse
Former star fund manager Neil Woodford and his investment firm, Woodford Investment Management (WIM), are facing significant financial penalties from the UK's Financial Conduct Authority (FCA) following the collapse of the Woodford Equity Income Fund (WEIF) in 2019. The FCA has imposed fines totaling nearly £46 million, with Woodford personally fined £5.89 million and WIM facing a £40 million penalty. Additionally, Woodford has been banned from holding senior management roles and managing funds for retail investors.
The WEIF, once valued at over £10.1 billion in May 2017, saw its value plummet to £3.6 billion by the time of its suspension in June 2019. The fund's downfall was attributed to "unreasonable and inappropriate investment decisions" made by Woodford and WIM, according to the FCA. The watchdog highlighted that the fund had sold off liquid assets and acquired harder-to-sell investments, resulting in only 8% of the fund's investments being sellable within seven days at the time of suspension. This was a stark contrast to the regulatory expectation that investors should be able to access their funds within four days.
WIM has expressed strong disagreement with the FCA's findings and intends to appeal the decision. The firm argues that the liquidity framework was imposed by Link Fund Solutions (LFS), the company responsible for the fund's liquidity management, and claims that the FCA had not previously objected to this framework. WIM also criticized LFS for what it described as a "disorderly fire sale of assets" following the fund's suspension.
The collapse of the WEIF affected approximately 300,000 investors, including 130,000 who invested through the platform Hargreaves Lansdown. Many of these investors are now pursuing legal action against Hargreaves Lansdown, seeking compensation for their losses.
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Scenario Analysis
The appeal by Woodford Investment Management could prolong the legal proceedings, potentially delaying any final resolution for affected investors. If the appeal is unsuccessful, the financial penalties and bans imposed by the FCA will likely stand, further impacting Woodford's career and reputation in the investment management industry.
The case also raises broader questions about the regulatory oversight of fund management practices, particularly concerning liquidity management and the responsibilities of fund managers and associated entities like Link Fund Solutions. The outcome of this case could lead to stricter regulations and oversight to prevent similar incidents in the future.
Investors and industry experts will be closely monitoring the appeal process and any subsequent regulatory changes, as these developments could have significant implications for the investment management sector and retail investors alike.
Former star fund manager Neil Woodford and his investment firm, Woodford Investment Management (WIM), are facing significant financial penalties from the UK's Financial Conduct Authority (FCA) following the collapse of the Woodford Equity Income Fund (WEIF) in 2019. The FCA has imposed fines totaling nearly £46 million, with Woodford personally fined £5.89 million and WIM facing a £40 million penalty. Additionally, Woodford has been banned from holding senior management roles and managing funds for retail investors.
The WEIF, once valued at over £10.1 billion in May 2017, saw its value plummet to £3.6 billion by the time of its suspension in June 2019. The fund's downfall was attributed to "unreasonable and inappropriate investment decisions" made by Woodford and WIM, according to the FCA. The watchdog highlighted that the fund had sold off liquid assets and acquired harder-to-sell investments, resulting in only 8% of the fund's investments being sellable within seven days at the time of suspension. This was a stark contrast to the regulatory expectation that investors should be able to access their funds within four days.
WIM has expressed strong disagreement with the FCA's findings and intends to appeal the decision. The firm argues that the liquidity framework was imposed by Link Fund Solutions (LFS), the company responsible for the fund's liquidity management, and claims that the FCA had not previously objected to this framework. WIM also criticized LFS for what it described as a "disorderly fire sale of assets" following the fund's suspension.
The collapse of the WEIF affected approximately 300,000 investors, including 130,000 who invested through the platform Hargreaves Lansdown. Many of these investors are now pursuing legal action against Hargreaves Lansdown, seeking compensation for their losses.
What this might mean
The appeal by Woodford Investment Management could prolong the legal proceedings, potentially delaying any final resolution for affected investors. If the appeal is unsuccessful, the financial penalties and bans imposed by the FCA will likely stand, further impacting Woodford's career and reputation in the investment management industry.
The case also raises broader questions about the regulatory oversight of fund management practices, particularly concerning liquidity management and the responsibilities of fund managers and associated entities like Link Fund Solutions. The outcome of this case could lead to stricter regulations and oversight to prevent similar incidents in the future.
Investors and industry experts will be closely monitoring the appeal process and any subsequent regulatory changes, as these developments could have significant implications for the investment management sector and retail investors alike.
