Woodford Investors Urged, RGL Management, a claims firm, has asked former Woodford Equity Income Fund (WEIF) investors to join its legal action against Hargreaves Lansdown.
According to the business, the case, which was brought in the High Court in October 2022 on behalf of around 3,000 fund investors, is the “only route” to recover “the full redress they are owed.”
RGL stated that everyone who invested in the former WEIF through the platform is eligible to join the claim and that it is already compiling a second claim for thousands of additional claimants who joined the group.
Woodford Investors Urged to Join Lawsuit Against Hargreaves Lansdown
Link Fund Solution said on Thursday (14 December) that its restitution scheme, which was backed by the Financial Conduct Authority, was approved by an overwhelming majority of investors – 93.7% in number and 96.1% in value – at a meeting on December 13th.
The Woodford scheme of arrangement has been approved.
According to the FCA’s figures, investors can expect to get roughly 77p per pound, for a total of up to £230 million.
Investors will no longer be able to pursue claims against LFS, its parent, or connected firms, or file claims with the Financial Services Compensation system as part of the redress system, which is subject to court approval with a hearing scheduled for 18 January 2024.
However, RGL contended that the restitution falls short of fully compensating investors in the former WEIF and that actions against Hargreaves Lansdown can still be brought regardless of the program.
The company further stated that it is now the only claimant group pursuing a “full recovery of losses” against the platform, and has asked investors who registered with Harcus Parker or Leigh Day for claims against LFS to join its suit instead, as long as they invested in the fund through the platform.
Woodford fund assets have shrunk by 40% since the latest dividend was declared.
“The RGL Group’s claim is for investor losses sustained as a result of Hargreaves Lansdown’s conduct in continuing to recommend the [former] WEIF right up until its highly publicized collapse, despite Hargreaves Lansdown’s knowledge of the fund’s longstanding portfolio diversification and liquidity issues,” RGL explained.
“As well as the balance of capital losses yet to be compensated, RGL Group claimants are also claiming damages for the loss of the opportunity of investing in alternative investments that, in contrast to the [former] WEIF, would have generated positive returns.”
The group stated that the overall value of its claim is estimated to exceed £200 million.
It further stated that claimants will not bear the costs of the legal actions against HL unless the claim is successful and that insurance has been obtained to shield investors from having to pay the platform’s legal fees if the claim is unsuccessful.
If the lawsuit is successful, RGL’s fee will be 25%, which it considers to be “the lowest of any group formed to pursue WEIF investor losses through court action.”
The FCA has issued a warning about the ‘unrealistic comeback’ of private Woodford litigation. “Following the result of the vote, we strongly urge any investors who invested in the [former] WEIF via Hargreaves Lansdown to join the RGL Group action, which has already been filed in the High Court,” said James Hayward, CEO of RGL Management.
“Because claims against Link are unlikely to be successful, the RGL Group’s claim against Hargreaves Lansdown is the only way for investors to obtain the full redress they deserve.”
“Any investors who invested in the [former] WEIF through Hargreaves Lansdown are eligible to join, even if they were previously signed up to a competitor action against Link.” Joining the claim is free, and no costs will be charged until the claim is successful. The RGL Group book is growing daily.
“We believe that Hargreaves Lansdown should be held accountable for its conduct with the WEIF and RGL and our legal team will pursue these claims tirelessly to recover all of the losses suffered by investors.”
Hargreaves Lansdown refused to comment.