Hargreaves Lansdown has been hit with a lawsuit on behalf of 1000’s of traders in Neil Woodford’s fund, the primary time the FTSE 100 funds grocery store has been sued over its promotion of the as soon as star stockpicker.
RGL Administration, a claims administration agency, is looking for tons of of hundreds of thousands of kilos in compensation for traders from Hargreaves Lansdown and fund administrator Hyperlink Fund Options in a lawsuit filed within the Excessive Courtroom.
The lawsuit is the primary to focus on Hargreaves Lansdown, which really helpful Woodford’s funds on its influential “greatest purchase” record of investments till the £3.7bn car was suspended in 2019.
Each Hargreaves Lansdown and Hyperlink have repeatedly rejected the allegations towards them. The businesses declined to touch upon the lawsuit from RGL.
Two different regulation companies, Leigh Day and Harcus Parker, thought of the case towards Hargreaves Lansdown however determined to solely pursue Hyperlink as an easier solution to attempt to get better cash.
“The RGL Group is resolute that each Hargreaves Lansdown and Hyperlink ought to be held accountable,” mentioned Alexander Weinberg, companion at regulation agency Wallace, which has been employed by RGL to deal with the case.
Round 300,000 traders had their cash trapped in Woodford’s flagship fund when it was frozen in June 2019.
Greater than 130,000 Hargreaves Lansdown purchasers have been invested within the Woodford fund in June 2019, in keeping with a letter from chief government Chris Hill to the Treasury Choose Committee on the time.
Hargreaves Lansdown urged Woodford to handle the rising share of the fund invested in small and personal firms in 2017, in keeping with the letter. Nonetheless, the platform maintained its advice till the day the fund collapsed.
Legal professionals for RGL will argue that absent Hargreaves Lansdown’s advice, traders may not have purchased the fund, or would have bought out as Woodford started to battle. It claims the corporate failed its authorized duties to prospects by not doing sufficient to speak its considerations in regards to the fund.
Claims towards the FTSE 100 group open a possible new technique of recovering cash for Woodford traders.
The claims towards Hyperlink argue that it failed its authorized obligation to supervise the fund, permitting liquidity issues with Woodford’s excessive allocation to non-public firms to escalate to the purpose the place it struggled to repay traders who wished to exit.
Hyperlink Fund Options already faces calls for for greater than £300mn in penalties and compensation from the Monetary Conduct Authority, and its Australian mum or dad firm has mentioned it is not going to foot the invoice if any profitable claims arising from Woodford are greater than the UK firm pays. Hyperlink disagrees with the FCA’s evaluation.
Legal professionals count on the court docket will set a deadline within the first half of subsequent yr for the claimant teams to enroll traders.