Talks are at an advanced stage between share registrar the Link Group and the FCA to draw a line under the Woodford Investment Management (LSE:WPCT) scandal, according to the UK regulator.
In a statement today, the FCA said: “We are in advanced confidential discussions with Link Group and LFS to determine whether the FCA’s proposed enforcement action against LFS can be resolved by agreement.
“The FCA is focused on ensuring that consumers affected by the suspension of the Woodford Equity Income Fund (WEIF) obtain redress.
“To assist a potential resolution, the FCA has provided time for Link Group to realise assets, including Link Group held assets, to meet the FCA’s concerns.”
Australian group Link's UK arm was cited by the FCA for its part in the collapse of the Woodford Equity Income fund in 2019, which closed after being unable to meet a run of redemption requests due to the illiquidity of its assets.
In a preliminary ruling last September, the FCA said it was fining Link Financial Solutions (LFS) £50mln and up to a further £306mln for possible redress as a result of its “failings in managing the liquidity of the WEIF”.
Link Financial Solution (LFS) has also been taken to court by investors for its role in the collapse of the fund, which at the start of its life had been worth £10bn, and also for the amount it has generated from the £3.7bn of assets held by the fund when it was ‘gated’ in 2019.
Payouts to investors subsequently have totalled £2.54bn, but there has been nothing since 2020 with losses of £870mln also booked.
Reports over the weekend suggested that Link is in talks to sell LFS and its UK financial solutions business to Irish firm Waygate, with the Aussie group adding it expects to receive nothing net from the sale and will take a charge of £257mln in its next accounts related to its UK unit.