© Reuters. Hargreaves Lansdown brand is seen on a smartphone in entrance of displayed similar brand on this illustration taken, December 1, 2021. REUTERS/Dado Ruvic/Illustration
By Kirstin Ridley and Carolyn Cohn
LONDON (Reuters) – Hargreaves Lansdown, a high British funding platform, has been hit by a multi-million pound lawsuit over the failure of fallen star supervisor Neil Woodford’s fairness revenue fund, which left lots of of 1000’s of buyers nursing losses.
Claims administration agency RGL mentioned it had filed the declare in London’s Excessive Courtroom on Friday on behalf of an preliminary 3,200 buyers in opposition to the London blue-chip firm, which promoted the previous flagship LF Woodford Fairness Earnings Fund (WEIF).
RGL can be suing Hyperlink Fund Options (LFS), the fund’s authorised company director, and mentioned its declare may high 100 million kilos ($112 million).
“Each establishments have failed WEIF buyers,” mentioned Alexander Weinberg, a associate at legislation agency Wallace, which is advising RGL.
Hargreaves declined to remark and LFS didn’t instantly reply to a request for remark over the weekend. LFS has mentioned beforehand it believed it had acted in accordance with relevant guidelines and in the very best pursuits of all buyers and would vigorously defend itself in opposition to claims.
It’s the third lawsuit in opposition to LFS over the best way it dealt with the fund, which managed billions of kilos earlier than it was suspended amid a political and public outcry in 2019, trapping 300,000 buyers and triggering an investigation by the Monetary Conduct Authority (FCA).
However RGL is the primary to additionally goal Hargreaves over its position within the scandal after Woodford, criticised for holding numerous hard-to-sell illiquid belongings, suspended the fund after struggling to fulfill redemption requests following months of underperformance. It was later closed and is being wound up.
RGL alleges that Hargreaves continued to suggest the WEIF to purchasers as much as the fund’s collapse, regardless of being conscious of liquidity and portfolio diversification issues. It additionally alleges LFS did not correctly administer and handle the fund.
The FCA has but to publish the total findings of its inquiry. But it surely mentioned final month it may high quality LFS 50 million kilos and order a 306 million pound redress scheme over its administration of the fund.
Legislation corporations Leigh Day and Harcus Parker have every already filed claims in opposition to LFS on behalf of round 13,000 and seven,000 buyers respectively. They’ve expressed hope that they’d be appointed joint claims managers at a December courtroom listening to.
($1 = 0.8953 kilos)
