FCA fines Woodford and former director £46m for management failures

The FCA has issued fines totalling almost £46m to Woodford Investment Management (WIM) and its former director and investment manager, Neil Woodford, for failures in their management of the Woodford Equity Income Fund (WEIF).

WIM has been fined £40m, and Mr Woodford has been fined £5.9m and banned from holding senior management roles and managing funds for retail investors.

WEIF was an investment fund that was suspended in June 2019 following a decrease in value from a high of over £10.1bn in May 2017 to just £3.6bn in the lead up to its suspension.

The FCA concluded that between July 2018 and June 2019, WIM and Mr Woodford made unreasonable and inappropriate investment decisions, disproportionately selling more and buying less liquid investments over the relevant period. As a result, only 8% of investments held by WEIF at the time of suspension could be sold within 7 days, despite rules at the time dictating that investors should have been able to access their funds within 4 days.

The FCA also found that WIM and Mr Woodford did not react appropriately to the fund’s value declining, which disadvantaged investors who remained in the fund.