Hargreaves Lansdown faces legal action over Woodford fund
Pedro Gonçalves, 22 March 2021
RGL Management has formally launched legal action against Hargreaves Lansdown, which continued to recommend Woodford Equity Income to its clients right up until its suspension in June 2019, even though its analysts raised concerns in 2017.
RGL Management has taken legal action against both Hargreaves Lansdown Asset Management and Link Fund Solutions, the fund’s authorised corporate director, as it was first reported by This Is Money and The Times.
The claims will centre around losses sustained directly as a result of the collapse of WEIF and also for “loss of opportunity” losses, suffered through missing out on alternative investments that, in contrast to WEIF, would have generated positive returns.
Those investors who suffered due to the terrible mismanagement of the WEIF deserve to be compensated.”
RGL’s letter before action, sent by Wallace, a London law firm, claims that Hargreaves Lansdown failed to “provide accurate, adequate and up-to-date information” about the Woodford fund in the days leading up to it being frozen.
Hargreaves kept the fund on its “best-buy list” right up until its suspension in June 2019, even though its analysts raised concerns about the illiquidity of stocks in November 2017.
When the fund closed, 134,000 clients of the wealth manager had direct holdings in Equity Income worth just over £1bn. A further 160,000 had indirect exposure through funds with holdings in Equity Income bringing total exposure up to £1.6bn.
