UK’s Hargreaves hit by lawsuit over Woodford fund failure By Reuters

By Kirstin Ridley and Carolyn Cohn

LONDON (Reuters) – Hargreaves Lansdown, a high British funding platform, has been hit by a multi-million pound lawsuit over the failure of fallen star supervisor Neil Woodford’s fairness earnings fund, which left a whole lot of 1000’s of traders nursing losses.

Claims administration agency RGL mentioned it had filed the declare in London’s Excessive Court docket on Friday on behalf of an preliminary 3,200 traders towards the London blue-chip firm, which promoted the previous flagship LF Woodford Fairness Earnings Fund (WEIF).

RGL can also be suing Hyperlink Fund Options (LFS), the fund’s authorised company director, and mentioned its declare may high 100 million kilos ($112 million).

“Each establishments have failed WEIF traders,” mentioned Alexander Weinberg, a accomplice at legislation agency Wallace, which is advising RGL.

Hargreaves declined to remark and LFS didn’t instantly reply to a request for remark over the weekend. LFS has mentioned beforehand it believed it had acted in accordance with relevant guidelines and in the very best pursuits of all traders and would vigorously defend itself towards claims.

It’s the third lawsuit towards LFS over the way in which it dealt with the fund, which managed billions of kilos earlier than it was suspended amid a political and public outcry in 2019, trapping 300,000 traders and triggering an investigation by the Monetary Conduct Authority (FCA).

However RGL is the primary to additionally goal Hargreaves over its function within the scandal after Woodford, criticised for holding a lot of hard-to-sell illiquid property, suspended the fund after struggling to fulfill redemption requests following months of underperformance. It was later closed and is being wound up.

RGL alleges that Hargreaves continued to advocate the WEIF to shoppers as much as the fund’s collapse, regardless of being conscious of liquidity and portfolio diversification issues. It additionally alleges LFS didn’t correctly administer and handle the fund.

The FCA has but to publish the complete findings of its inquiry. Nevertheless it mentioned final month it may high-quality LFS 50 million kilos and order a 306 million pound redress scheme over its administration of the fund.

Regulation corporations Leigh Day and Harcus Parker have every already filed claims towards LFS on behalf of round 13,000 and seven,000 traders respectively. They’ve expressed hope that they’d be appointed joint claims managers at a December courtroom listening to.

($1 = 0.8953 kilos)