Regulatory Authority Imposes Hefty Penalty on Woodford Investment Management
In a significant move, the Financial Conduct Authority (FCA) has announced a £230 million redress scheme for investors who were left stranded when the Woodford Equity Income Fund (WEIF) was suspended in June 2019.
The redress scheme is intended to compensate investors for the losses they incurred as a result of the fund's suspension. It does not include any fines or penalties for Woodford Investment Management (WIM) or Neil Woodford, the fund's manager.
The latest developments regarding the FCA's investigation into Neil Woodford, WIM, and the WEIF liquidity issues culminated in substantial fines and bans announced in August 2025. The FCA fined Neil Woodford £5.9 million and WIM £40 million, totaling nearly £46 million.
Key findings from the FCA's investigation revealed that Woodford and WIM disproportionately sold liquid assets while acquiring illiquid ones, leaving only 8% of WEIF's assets liquid enough to be sold within seven days at the time of the fund's suspension. This failed to meet regulatory rules requiring investor access to be possible within four days, contributing to the fund's collapse from over £10.1 billion in May 2017 to £3.6 billion by suspension.
Neil Woodford was banned from holding senior management roles and managing funds for retail investors, effectively ending his career in retail fund management. Woodford and his firm have challenged the FCA's decision and referred it to the Upper Tribunal where both factual and legal points will be contested.
The FCA considers Woodford's and WIM's failings led to a significantly increased risk of the fund being suspended. The FCA did not fine Link, the third-party administrator, in its findings against the company. However, the redress scheme was set up as part of the FCA's findings against Link for its role in the suspension of the WEIF.
Under rules in place at the time, investors should have been able to access their funds within 4 days. The redress scheme does not guarantee that investors will receive their full losses back, but it is intended to provide some compensation. The litigation and legal dispute with the FCA are ongoing as of mid-August 2025.
The FCA believes that Mr Woodford held a defective and unreasonably narrow understanding of his responsibilities in managing the fund's liquidity. The fines and bans dwarf other FCA penalties in 2025, illustrating the severity with which the regulator views the failings in this high-profile case.
The Woodford Equity Income Fund was managed by Neil Woodford and WIM. Between July 2018 and June 2019, WIM and Mr Woodford made unreasonable and inappropriate investment decisions, according to the FCA. The redress scheme does not affect the £5.8 million fine imposed on Neil Woodford. The FCA has also fined WIM £40 million.
Investors who believe they are eligible for the redress scheme should contact their fund provider for more information. The FCA encourages all investors to seek advice if they are unsure about their rights or the redress scheme.
- The Financial Conduct Authority (FCA) has announced a £230 million redress scheme for investors affected by the suspension of the Woodford Equity Income Fund (WEIF) in 2019, which is intended to compensate them for their losses.
- The FCA's investigation into Neil Woodford, Woodford Investment Management (WIM), and the WEIF liquidity issues resulted in substantial fines and bans in 2025, with Neil Woodford being fined £5.9 million and WIM fined £40 million.
- The redress scheme was set up as part of the FCA's findings against Link, the third-party administrator, due to its role in the WEIF suspension, though Link was not fined in the investigation.
- The FCA believes that Neil Woodford and WIM's failings in managing the fund's liquidity significantly increased the risk of the fund being suspended, breaching regulatory rules requiring investor access within four days.
- Investors who believe they are eligible for the redress scheme are encouraged to contact their fund provider for more information and can seek advice if they are unsure about their rights or the redress scheme, as the litigation and legal dispute with the FCA are ongoing.
