The FCA has provisionally fined Neil Woodford and Woodford Investment Management (WIM) for failures in their management of the Woodford Equity Income Fund (WEIF).

It has decided to fine Mr Woodford £5,888,800 and ban him from holding senior manager roles and managing funds for retail investors.

The FCA has also decided to fine WIM £40m.

Mr Woodford and Woodford Investment Management have referred the Decision Notices to the Upper Tribunal where each will present their cases.

The FCA said that any findings in the Decision Notices are therefore provisional and reflect the FCA’s belief as to what occurred and how it considers their behaviour should be characterised, the regulator said.

WEIF was an investment fund managed by Mr Woodford and WIM. They were responsible for managing the liquidity of the fund, so that investors could redeem their investments and be repaid.

The fund was suspended in June 2019, leaving investors – a significant majority of whom were ordinary retail customers – unable to access their money. The value of the WEIF had fallen from a high of over £10.1bn in May 2017 to just £3.6bn in the run-up to its suspension.

The FCA concluded that between July 2018 and June 2019 WIM and Mr Woodford made unreasonable and inappropriate investment decisions.

The regulator said they disproportionately sold more liquid investments (those easier to sell) and bought less liquid ones over this period. This meant that at the time of suspension only 8% of the investments held by WEIF could be sold within 7 days. Under rules in place at the time, investors should have been able to access their funds within 4 days.

WIM and Mr Woodford did not react appropriately as the fund’s value declined, the FCA said, and its liquidity worsened and more investors withdrew their money. This disadvantaged investors who remained in the fund, compared to those who had withdrawn their investment before the fund was suspended.

The FCA concluded that Mr Woodford held a defective and unreasonably narrow understanding of his responsibilities. Despite his senior role, he did not accept that he had a responsibility to oversee the management of the fund’s liquidity, including in interviews conducted by the FCA.

He also failed to provide proper oversight of WIM’s relationship with Link Fund Solutions (Link), the WEIF’s authorised corporate director, including after Link raised concerns about the fund’s liquidity.

The FCA said it considered Mr Woodford’s and WIM’s failings led to a significantly increased risk of the fund being suspended.

Steve Smart, joint executive director of enforcement and market oversight at the FCA, said: "Being a leader in financial services comes with responsibilities as well as profile. Mr Woodford simply doesn’t accept he had any role in managing the liquidity of the fund.

"The very minimum investors should expect is those managing their money make sensible decisions and take their senior role seriously. Neither Neil Woodford nor Woodford Investment Management did so, putting at risk the money people had entrusted them with."

In April 2024 the FCA published a warning notice against Neil Woodford. It said he had a "defective and unreasonably narrow" understanding of his responsibilities for managing liquidity risks.

Soon after Mr Woodford launched his new website Woodford Views, he wrote: “I am neither hero nor villain.”

In June Mr Woodford launched a subscription-based investment strategy product aimed at long-term investors.

In a statement from Woodford's lawyers BCLP on behalf of Woodford Investment Management, there was a strong rejection of the FCA's action. The statement said: "We strongly disagree with the FCA’s decision to pursue enforcement action against Neil Woodford and Woodford Investment Management (WIM) and intend to challenge it. Both decisions are subject to an appeal to the Upper Tribunal and have no effect pending the determination of the case by the Tribunal.

"Mr. Woodford has been sanctioned in spite of managing the Fund within a framework designed to ensure sufficient liquidity. In five years of managing WEIF, neither Link nor the FCA raised concerns or initiated discussions with him regarding liquidity management. Yet the FCA now argues that he should have independently identified and addressed flaws in the framework designed and imposed by Link, which was accepted by the FCA."