The UK's financial regulator has launched a high-stakes court battle against embattled investment manager Neil Woodford over allegations he provided unauthorised online investment advice, just months after being barred from holding senior City roles. According to data from the Financial Conduct Authority (FCA), this move could affect an estimated 7,500 investors who may have received unsolicited advisory services through Mr Woodford's new vehicle, W4.0.
The FCA confirmed it is seeking a court injunction to prevent further unauthorised activities by Mr Woodford and his UAE-registered company, W4.0, which the regulator claims offers investment advice without proper authorisation. This development marks a significant escalation in the ongoing scrutiny of Mr Woodford's career, following the collapse of his flagship fund and subsequent losses for hundreds of thousands of investors.
Mr Woodford's high-profile fall from grace began with the suspension of his £13 billion Woodford Equity Income Fund in June 2019, which left many investors trapped. The subsequent wind-up of the fund resulted in substantial losses for over 300,000 shareholders, prompting widespread criticism and calls for improved regulatory oversight.
The FCA's ban on Mr Woodford from senior managerial roles in March this year was a direct consequence of its investigation into the fund's collapse, which found that he failed to manage liquidity adequately, leaving investors unable to redeem their holdings. The regulator's latest move suggests it believes Mr Woodford has continued to operate in breach of financial regulations through his new entity.
The involvement of W4.0 raises questions about jurisdiction and the effectiveness of UK regulatory bodies in enforcing standards against entities operating internationally. By pursuing an injunction, the FCA demonstrates its commitment to upholding regulatory standards and protecting consumers, even if it means navigating complex global enforcement challenges.