The Financial Conduct Authority said on Monday it had ordered fund manager Link to limit the amount as part of terms related to Link’s takeover by Canadian cloud-based software company Dye & Durham. The money could eventually be used to compensate the 300,000 investors affected by the collapse of the Woodford Equity Investment Fund (WEIF) three years ago, including those who lost their savings after it failed. It is the first time the regulator has disclosed any penalty related to the fund’s collapse. Link was responsible for monitoring and overseeing Woodford’s investments before the fund failed in October 2019. The regulator said on Monday afternoon that it is likely to force Link Fund Solutions (LFS) to pay a “financial penalty and/or consumer compensation” as part of its investigation into the suspension and possible collapse of WEIF. “The FCA’s current view is that the redress payment that LFS could be required to pay could be up to £306 million. This remedial proposal reflects the FCA’s current view of LFS’s failures to manage WEIF’s liquidity,” it said in a statement. “It does not reflect any amount that may be owed to anyone else, including members of the fund, as a result of possible wrongdoing by other parties.” The City regulator stressed that the amount was provisional and that Link could challenge any financial penalty imposed by the FCA. Woodford’s equity fund was worth more than £10bn at its peak but has suffered from several underperforming investments in companies including estate agent Purplebricks, finance firm Burford Capital and home lender Provident Financial. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. This series of bad bets, combined with Woodford’s decision to put money into some private unlisted companies that were harder to sell, led to the fund’s suspension and eventual collapse. The manager has since closed the fund and returned money to many investors at a heavy loss. Link is separately facing a series of private legal cases from investors hoping to recover millions of pounds from the manager, who they claim failed in his duties to monitor the fund’s financial risks and liquidity. Link has previously stated that he would vigorously defend himself against the legal challenge.
