FCA slaps former star stock picker Neil Woodford and fund with £46m fine

The Financial Conduct Authority said on Tuesday that it has fined former star stock picker Neil Woodford and Woodford Investment Management for failures in management of the Woodford Equity Income Fund (WEIF).

The FCA has fined Woodford just under £5.9m and banned him from holding senior manager roles and managing funds for retail investors. WIM has been fined £40m.

The fund was suspended in June 2019, leaving investors - most of them ordinary retail customers - unable to access their money.

The value of the WEIF had fallen from more than £10.1bn in May 2017 to just £3.6bn in the run-up to its suspension.

The FCA concluded that between July 2018 and June 2019 WIM and Neil Woodford made "unreasonable and inappropriate" investment decisions. They disproportionately sold more liquid investments - those that are easier to sell - and bought fewer liquid ones.

This meant that at the time of suspension only 8% of the investments held by WEIF could be sold within seven days. Under rules in place at the time, investors should have been able to access their funds within four days.

Steve Smart, joint executive director of enforcement and market oversight at the FCA, said: "Being a leader in financial services comes with responsibilities as well as profile. Mr Woodford simply doesn’t accept he had any role in managing the liquidity of the fund.

"The very minimum investors should expect is those managing their money make sensible decisions and take their senior role seriously. Neither Neil Woodford nor Woodford Investment Management did so, putting at risk the money people had entrusted them with."