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Investment platform Hargreaves Lansdown with link to bankrupt Woodford equity fund faces massive lawsuit

Hargreaves Lansdown, a major UK investment platform, has been hit with a multi-million pound lawsuit over the failure of ousted star manager Neil Woodford’s equity income fund, which left hundreds of thousands of investors incur losses.

Laims management firm RGL said it filed the suit in London’s High Court on Friday on behalf of 3,200 initial investors against the blue-chip London firm, which promoted former flagship fund LF Woodford Equity Income Fund ( WEIF).

RGL is also suing Link Fund Solutions (LFS), the fund’s authorized administrator, and said its claim could exceed £100 million (€115 million).

“Both institutions let down WEIF investors,” said Alexander Weinberg, a partner at law firm Wallace, which advises RGL.

Hargreaves declined to comment, and LFS did not immediately respond to a request for comment over the weekend.

LFS has previously said it believes it acted in accordance with applicable rules and in the best interests of all investors, and will vigorously defend against the claims.

This is the third lawsuit against LFS over its handling of the fund, which managed billions of pounds before it was suspended amid political and public outcry in 2019, trapping 300,000 investors and triggering a Financial investigation. UK Conduct Authority (FCA).

But RGL is the first to also target Hargreaves over its role in the scandal after Mr Woodford – criticized for holding a large number of hard-to-sell illiquid assets – suspended the fund after it struggled to meet redemption requests after months of underperformance.

It was subsequently closed and is being liquidated.

Neil Woodford (62) was once one of Britain’s most prominent investors.

RGL alleges that Hargreaves continued to recommend WEIF to its clients until the fund collapsed, despite being aware of liquidity and portfolio diversification issues.

He also alleges that LFS failed to properly administer and manage the fund.

The FCA has yet to release the full findings of its investigation. But he said last month he could fine the LFS £50million and order a £306million reparations package for its handling of the controversial fund.

The FCA was reacting to news that Dye and Durham were offering to take over LFS and six other companies from Australian share registration firm Link Group, all licensed by the UK financial watchdog.

In early September, Dye & Durham and Link received approval from the Australian competition regulator for the takeover, ending a nine-month acquisition saga in which there were multiple bids and rival bidders vying for Link’s stake in the online property settlement company. PEXA group.

Law firms Leigh Day and Harcus Parker have already filed suits against LFS on behalf of around 13,000 and 7,000 investors respectively.

They expressed hopes of being named joint claims handlers at a hearing in December.

In June, Harcus Parker filed the case in the High Court in London on behalf of 1,500 early investors against LFS. They are seeking damages of more than £18million against LFS for its management of Mr Woodford’s equity income fund.