Neil Woodford fined £46m and banned for senior city role due to fund crash
Out-of-control fund manager Neil Woodford and his now-defunct investment firm were fined £46 million by the Financial Conduct Authority (FCA) to make Woodford stock revenue poorly, which broke in 2019 and turned hundreds of thousands of retail investors down.
Woodford, once known as one of the most successful stocks in the UK, was also banned from holding any senior role in the city, and the FCA declared him “inappropriate” to manage funds or leading financial institutions.
The FCA attempted to impose a personal fine of £5.9 million in Woodford, which is his major shareholder, faces a fine of £40 million. The scale of the fine reflects Woodford’s “extremely prominent visibility” and the lasting damage caused by public trust in retail investment, regulators said.
The fine remains temporary, awaiting Woodford’s appeal to court, where he is expected to challenge the findings and scale of the fine. Woodford insisted in a provocative statement that he strongly disagrees with the decision and said the court would “a desperate need to clarify the FCA’s own actions.”
At the peak of his career, Woodford managed over £15 billion in assets, building a reputation at Invesco Perpetual before launching WIM in 2014. His flagship fund, Woodford Equity Incority Funity (Weif), was sold to retail investors seeking stability and revenue (not yet spectacularly) fold at a redemption rate, demanding redemption of the fund, which continued the fund, which conquered 2019 in 2019.
When the fund was finally liquidated, the value received by investors was £1 billion lower than the value of the shares on the day of suspension. The FCA found that between July 2018 and June 2019, Woodford and WIM made a series of “unreasonable and inappropriate investment decisions”, including selling current assets and redoubling efforts, hard-to-invest investments – a strategy that severely undermines the fund’s ability to meet investors’ ability to cancel investors.
The FCA said that despite Woodford’s high-profile and sense of responsibility, he refused to accept any role in managing the liquidity of the fund.
“What investors at the minimum should expect is that those who manage money will make informed decisions and take their senior positions seriously,” said Steve Smart, co-executive director of FCA’s law enforcement and market oversight.
“Neil Woodford and Woodford Investment Management companies did not do this, which made people entrust them with their money.”
The fall in Woodford is also marked by reports of personal luxury. In the four years before the collapse, he and his co-founder Craig Newman took a £98 million dividend from the business. Woodford uses these proceeds to a range of luxury cars, a 423 hectare Cotswold estate, a £6.35 million Devon vacation home, and even a stable horse.
The campaign panel has re-called for the forfeiture of Woodford’s CBE, which he was awarded in 2013 for providing services to the UK economy. Critics say that this is no longer suitable given the scale of investor harm caused by its behavior.
The FCA noted that while Woodford’s actions were negligent rather than dishonest, his failure to maintain investor funds had serious consequences and guaranteed strong enforcement actions.
The Woodford scandal remains one of the most compelling failures in UK retail fund management. More than 300,000 investors have been affected, and many are still frustrated by the slow pace of regulatory action despite some compensation already obtained through separate settlements, including a £230 million remediation plan agreed with Link Fund Solutions last year.
The latest FCA ruling may mark a turning point, but the legend is far from over as Woodford vows to fight the court outcome.
The financial community will keep a close eye on the case as it proceeds – not only for investors’ justice, but also for the future of responsibility, law enforcement and trust in UK financial services.
