Some 100 wounded investors are set to go to court to fight to recover the losses they suffered after the collapse of the Woodford Equity Income fund.
Law firm Leigh Day have officially started court proceedings against Link Fund Solutions Limited – which oversaw the fund on behalf of investors.
The firm has issued a claim form on behalf of an initial group of 100 investors and said it will be will be issuing proceedings on a rolling basis for all of its clients, which number more than 11,000.
Fallen fund manager Neil Woodford was criticised for ploughing investors’ cash into several illiquid investments
Leigh Day claims LFS breached the financial regulator’s rules by allowing the fund to hold too many illiquid investments and that this ultimately led to the fund’s collapse.
Leigh Day is bringing legal action against LFS because it is the ‘authorised corporate director’ of the fund and was responsible for ensuring that it was managed in a way that complied with the Financial Conduct Authority’s rules.
The move follows a ‘detailed and extensive’ letter before action and ‘significant pre-action correspondence’ which Leigh Day has had with LFS’ lawyers, Clifford Chance.
LFS has made clear its intent to defend the claims ‘vigorously’, Leigh Day said.
Boz Michalowska, partner at law firm Leigh Day, said: ‘This is a big step forward in the legal action which we hope will allow investors of the Woodford Equity Income Fund to get justice and their hard-earned pensions and savings returned to them.’
Cliff Weight, Woodford Campaign Director at ShareSoc said: ‘This is a huge step forward in getting compensation for the many thousands of unfortunates who lost money in Woodford’s WEIF funds.
‘Leigh Day’s issuing of proceedings is a big milestone.’
As many as 500,000 savers were hit by the collapse of the Woodford Equity Income fund in 2019, and around £200million is still stuck in the suspended Equity Income fund. Some investors have lost more than half the money they paid in.
Fallen fund manager Neil Woodford was criticised for ploughing investors’ cash into several illiquid investments, which are notoriously difficult to sell quickly.
Yet earlier this year, he announced the launch of a new firm for professional investors only, infuriating both savers and professionals.
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