Woodford probe delay lands FCA in hot water as 500,000 investors remain the dark over fund scandal

City Watchdog Under Scrutiny Over Neil Woodford Scandal Investigation Delay

The Financial Conduct Authority (FCA), the UK’s City watchdog, is facing criticism regarding its handling of the Neil Woodford scandal. Lawmakers and policymakers have voiced concerns that approximately 500,000 investors are still uninformed about the FCA’s conclusions, six years after the fund’s collapse. This ongoing uncertainty in the Woodford saga highlights critical issues for investment fraud and financial services regulation.

Investors had £3.7 billion locked within fund manager Neil Woodford’s primary fund when it was suspended by regulators in 2019. The FCA cautioned in September that resolutions regarding potential actions against Woodford might not occur until 2026 or later, prolonging the wait for affected savers.

Parliamentary Group Questions FCA Approach

The All-Party Parliamentary Group (APPG) on Investment Fraud and Fairer Financial Services has expressed serious reservations about the FCA’s management of this significant case. The group’s intervention underscores growing unease about the protracted timeline and lack of transparency in the investigation.

In a recent open letter addressed to the House of Commons Treasury Select Committee, the APPG stated, ‘The FCA has yet to release its comprehensive report on the matter, leaving over 500,000 individuals uninformed about the details of what transpired.’ The letter further noted that the Committee had previously contacted the watchdog in 2022, urging for a swift resolution to the inquiry.

Demands for Transparency and Accountability

The APPG’s letter raises pointed questions for the financial regulator:

• Why has the FCA investigation extended for such a lengthy duration?
• Why did the watchdog fail to take decisive and timely action in response to the red flags that were reportedly raised as early as 2015?

These questions emphasize the demand for greater accountability and clarity from the FCA regarding its supervisory actions and investigative processes in the lead-up to the Woodford fund collapse.

FCA Defends Compensation Efforts

Responding to the criticism, an FCA spokesperson stated that the authority acknowledges the difficulties faced by those who incurred financial losses. The spokesperson highlighted that the FCA has been active in facilitating a compensation scheme. This scheme, designed to partially reimburse investors, has received the endorsement of 90 percent of eligible claimants.