Legal claims for compensation are being considered against the Woodford Equity Income fund's (WEIF) authorised corporate director (ACD) Link Fund Solutions, which is accused of early-stage failures in the fund's collapse, a failure to act in the best interests of investors, and ultimately having not "done its job properly".
Link, which today (5 June) also announced it had agreed to sell a significant portion of the fund's remaining assets, held an important role in oversight and investor protection in its role ACD of the fund, which first suspended a year ago this week.
The WEIF affair has led to separate legal challenges, with law firms Leigh Day and Slater & Gordon seeking compensation for investors in the former Woodford fund.
To date, Leigh Day have been contacted by over 3,000 former WEIF investors and the firm has confirmed that investigations into both Link and Hargreaves Lansdown are "ongoing", while Slater & Gordon also confirmed that they are investing claims into Link regarding its "obligation to investors" and its "actions following the Woodford fund collapse".
Nelsons, which has also been representing investors pursuing legal action against Hargreaves Lansdown for its continued promotion of WEIF despite underperformance, has now said the law firm's investigations had raised "significant questions" about the ACD.
Link has faced widespread criticism for its role in the collapse of WEIF and has been accused of "falling asleep" at the wheel over its role in overseeing its suspension.
Critics, including former chair of the Treasury Select Committee Nicky Morgan MP, allege Link's involvement as an ACD may have had "holes in the process" amid claims from industry commentators they could "get away with it again" at another fund house.
In its role as ACD, Link is supposed to ensure funds stick to the rules. In Woodford's case, that included making sure the flagship fund stayed below its limits on illiquid holdings.
It was responsible for valuing the unquoted securities in the fund and was heavily involved in both Woodford's attempts to list some of his holdings on the Guernsey Stock Exchange and the transfer of its unquoted assets to Woodford Patient Capital.
Neil Woodford himself was highly critical of the ACD, describing its decision to wind up the Woodford Equity Income fund as one he "cannot accept, nor believe is in the long-term interests of…investors".
However, Link told Investment Week in November that it had "at all times acted in accordance with applicable rules and in the best interests of all investors".