As a follow up to the Woodford Fund saga, Financial Conduct Authority Chief Executive Andrew Bailey has disclosed the circumstances surrounding the matter.
It would be recalled that LF Woodford Equity Income Fund stopped withdrawals while still charging fees after the fund received massive withdrawal requests.
Bailey told lawmakers on parliament’s Treasury Select Committee that Woodford took advantage of the loopholes that of flawed European Union rules before withdrawals had to be halted.
So in short, Woodford went ahead to list some assets on an exchange in the offshore dependency of Guernsey where there is very little if any activity.
“Having had these two breaches early last year – some people describe them as technical – but actually they were symptomatic of the fact that they were sailing close to the wind, and that’s what triggered our interest.”
The FCA has opened a formal investigation into events surrounding the suspension and the listing of some of the funds’ assets in Guernsey.
“Listing something on an exchange where trading doesn’t happen, as far as I can see, doesn’t actually count as liquidity,” Bailey said.
The real problem facing Neil Woodward’s stock picking empire is the uncertainty in Brexit negotiations which has weakened investor confidence in many of his stock picks.
Investment fund Hargreaves Lansdown with major exposure to Woodward’s Equity Income Fund, saw the second biggest crash in the FTSE-100, down 4.6% at 2,126p according to data by Guardian.
