A group of investors in the former flagship Woodford Investment Management (LSE:WPCT) equity fund has accused the UK's financial watchdog of "misleading communications" about the redress scheme that will be decided later this month.
In a last-minute open letter, the Woodford Campaign Group of roughly 700 investors called on the Financial Conduct Authority (FCA) to withdraw its statement backing the redress scheme as the "best way" for investors to get their money back.
Investors in the former Woodford Equity Income fund (WEIF) wishing to access the scheme had until 5pm yesterday to register to vote for the package, with the vote due to take place on 13 December and requiring a majority of numbers and 75% by value to succeed.
The letter, which is written by campaigner Andy Agathangelou on behalf of the campaign group, said: “The FCA has knowingly and wilfully misled, in an attempt to ensure the vote goes the way the FCA desperately needs it to, to avoid a substantial claim on the Financial Services Compensation Scheme.
“For all these reasons we feel duty bound to challenge the FCA in relation to its problematic and persistent pattern of misleading communications connected to the Woodford scandal.”
Among the information on the FCA's website on the redress scheme, the regulator said it "appreciates there may be a possibility that alternatives to the scheme, including the FSCS, could theoretically enable some investors to recover more.
"Those alternatives are however deeply uncertain. Given the considerable uncertainty of outcome and the time that any alternative processes would take (potentially years), the FCA continues to consider that the scheme is the quickest and best chance for investors to obtain a better outcome than might otherwise be achieved."
If the proposed redress amount of £230 million is paid in full then investors will have recovered approximately 77p in the pound, according to the FCAs' latest calculation.
In April, the FCA ruled that investors will receive up to £235 million of redress from Link Fund Solutions Limited (LFSL), the administrator of the fund, which was less than the £306 million determined in its initial assessment last September.
An investigation found LFSL, which is owned by Australia's Link Group, made "critical mistakes and errors" in managing the Woodford fund's liquidity that resulted in the fund failing to have enough liquidity from September 2018.
Last week, an LFSL spokesperson said: "We continue to believe the scheme is the best option available for investors, both materially enhancing the amount of redress available from LFSL and providing the fastest route for redress possible. Without the scheme there is no guarantee of any compensation for investors.”