Hundreds of wounded investors have flocked to take legal action after fallen fund manager Neil Woodford announced a brazen comeback.The disgraced stoc
Hundreds of wounded investors have flocked to take legal action after fallen fund manager Neil Woodford announced a brazen comeback.
The disgraced stock-picker announced his return less than two years after the collapse of his investing empire and £3.7 billion flagship fund.
As many as 500,000 savers were hit by the crisis, and around £200 million is still stuck in his suspended Equity Income fund. Some investors have lost more than half the money they paid in.
Unwelcome return: Hundreds of wounded investors have flocked to take legal action after fallen fund manager Neil Woodford announced a brazen comeback
The former Invesco fund manager was criticised for ploughing investors’ cash into several illiquid investments, which are notoriously difficult to sell quickly.
Yet now he has announced he will launch a new firm for professional investors only. His comeback has sent shockwaves throughout the industry and has infuriated both savers and professionals.
The suspended fund is now being wound up by Link Fund Solutions (LFS).
With no alternative way to recoup their lost cash, thousands of investors have signed up to group claims organised by law firms to try to win compensation.
Legal firm Leigh Day, which is putting together a claim against LFS on behalf of investors, says another 200 people have signed up to its cases since Woodford revealed his return on Sunday. It is pursuing LFS as the ‘authorised corporate director’ of the fund.
Leigh Day claims LFS breached the financial regulator’s rules by allowing the fund to hold too many illiquid investments.
Jack Starmer (left) invested £5,627 as part of a portfolio to save for his deposit, while Paul McInerney (right) has lost almost £9,000 of his £28,000 investment
Retired teacher Anne Woolgar (left) invested a five-figure sum into the doomed Equity Income fund, while Richard Batchelor (right) invested £2,000 in the fund
Another firm, Harcus Parker, has heard from around 100 more furious claimants. In all, over 10,000 investors are involved in both lawsuits.
Industry insiders are also dismayed over the fund manager’s return, and some of his own former colleagues spoke out against him.
Richard Wilson, chief executive of Interactive Investor, says: ‘The Woodford saga of management failure and huge losses is far from over.
‘Retail investors are the big loser again, and confidence in the whole sector has been damaged.’
Leigh Day and Harcus Parker are taking on claimants on a no-win, no-fee basis.
Yesterday, campaigner Gina Miller and fund manager Alan Miller called on the Treasury Select Committee to launch an investigation into the collapse of the fund.
Regulator the Financial Conduct Authority is more than 18 months into an investigation into the events that led to its suspension.
Izzy and Andrew Russell, who have lost more than £8,000, have signed up to Leigh Day’s group claim
And yesterday campaigners called for the City watchdog to publish its findings as soon as possible.
Woodford investor Richard Batchelor had not planned to sign up to a class action case, but after hearing of Woodford’s comeback plans he is determined to do so.
The former printing company owner, 67, and his wife Kitrina, 68, had invested £2,000 in the fund.
Richard, from Ferndown, Dorset, says: ‘It’s like he has just got away with it and I don’t think he realises the damage he has caused.’
Meanwhile, Andrew Russell, 64, has lost more than £8,000 after ploughing 10 per cent of his life savings into the fund.
The father of three, who lives with wife Izzy in Guisborough, North Yorkshire, has signed up to Leigh Day’s group claim.
He says: ‘When I read that Woodford was establishing a new firm, I could have choked on my cornflakes. Saying ‘sorry’ is not enough, he needs to do the honourable thing and exclude himself from managing investments.’
Retired teacher Anne Woolgar also believes Woodford should be banned from returning for now.
She and husband David, 71, from Surrey, invested a five-figure sum into the doomed Equity Income fund, but so far they have received only two-thirds of their money back.
Anne, 70, joined Leigh Day’s claim because she felt determined to hold the investment manager to account. ‘Woodford hasn’t behaved well and he should be suspended from setting up any new firms,’ she says.
Meanwhile, Jack Starmer, 27, was forced to delay his first property purchase by six months as a result of the fund’s suspension.
He had invested £5,627 as part of a portfolio to save for his deposit. But so far he has received only £2,058 back and has now joined Leigh Day’s group claim.
Jack, who lives in Edgware, North London, says: ‘It felt like him saying ‘sorry’ was more of a publicity stunt to promote his new firm, rather than a genuine apology.’
And fellow investor Paul McInerney, 50, has lost almost £9,000 of his £28,000 investment.
Paul, from Sevenoaks, Kent, says: ‘Woodford seems to see this as just a blip in his flawless career, but he doesn’t realise that it cost some investors their life savings.
‘He was the architect of his own downfall and he’ll never be able to name a fund after himself again.’
Spokesmen for Neil Woodford and LFS declined to comment.