Woodford latest: FCA issues update statement on potential enforcement action against Link FS.

by | Sep 21, 2022

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This morning, the FCA has issued the following statement regarding potential enforcement action against Link Fund Solutions Ltd, which managed the collapsed LF Woodford Equity Income Fund:

Following an announcement made on 21 September by Link Group to the Australian Securities Exchange, the Financial Conduct Authority (FCA) is providing a short update on its proposed enforcement action against Link Fund Solutions Ltd (LFS). 

LFS is a subsidiary of Link Group. LFS managed the LF Woodford Equity Income Fund (WEIF). The FCA has been investigating the circumstances leading to the suspension of the WEIF. 

As confirmed in Link Group’s statement the FCA has issued LFS with a draft Warning Notice following its investigation. 


Issuing a draft Warning Notice is a normal step in the FCA’s enforcement process and provides a recipient with an opportunity to resolve the case by agreement. Accordingly, the draft Warning Notice is not a final decision. Link will now have 14 days to respond to the Notice. Unless it chooses to resolve the case by agreement within that period, LFS will have an opportunity to challenge the FCA’s findings and the enforcement action proposed in the draft Warning Notice at the Regulatory Decisions Committee, the FCA’s independent decision maker in contested disciplinary cases, and through the Upper Tribunal.

The draft Warning Notice includes a proposed penalty of £50 million, before any discounts for prompt settlement. In addition, the notice sets out the basis for redress payment LFS could be required to pay of up to £306 million. 

This potential redress figure reflects the FCA’s current view of LFS’s failings in managing the liquidity of the WEIF. It does not reflect any amount which may be owed to anyone else, including members of the fund, as a result of potential wrongdoing by other parties. FCA-determined redress is based on misconduct rather than losses caused by fluctuations in the market value or price of investments. 


The FCA is aware of the potential takeover of Link Group by Dye and Durham (D&D). The proposed takeover involves the acquisition of seven firms, including LFS, authorised by the FCA. D&D is required to obtain FCA approval to take control of these firms. 

The FCA previously confirmed that it had approved the acquisition of LFS but subject to a condition. This condition requires D&D to make funds available to meet any shortfall within LFS in the amount available to cover any redress payments LFS may be required to make, up to £306 million.

The FCA’s priority is to protect consumers and the integrity of the UK financial system. With the investigation into LFS complete, it is right to progress it by issuing a draft Warning Notice. The FCA is focused on ensuring that the right funding is in place so affected consumers are able to access as much redress as possible.


Given the FCA’s enforcement case with LFS is ongoing, and in advance of any settlement discussions, the FCA is not currently able to provide any further information. 

There are multiple parties under investigation in relation to the circumstances that led to the suspension of the LF Woodford Equity Income Fund. These investigations continue and they will consider any further failings which may have negatively impacted investors.


  1. The FCA’s Enforcement Information Guide

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