By Kirstin Ridley
LONDON (Reuters) - More than 4,000 investors, burnt by the 2019 failure of the flagship Woodford investment fund, will be added to an over 200- million-pound ($247 million) lawsuit against Hargreaves Lansdown (LON:HRGV), claims management group RGL said on Tuesday.
RGL Management, which filed its case against the top British investment platform in October 2022, says it now has more than 7,000 claimants and that London court proceedings would "move forward over the coming months".
Hargreaves Lansdown declined to comment.
The case against broker Hargreaves, which promoted the Woodford fund, is the only current lawsuit seeking compensation after a High Court judge approved a redress package of up to 230 million pounds ($284 million) offered by Link Fund Solutions (LFS), the Woodford fund's authorised corporate director, in February.
The failure of the Woodford Equity Investment Fund (WEIF), which was valued around 3.65 billion pounds at its collapse following outsized bets on illiquid assets, trapped 300,000 investors and triggered a regulatory investigation.
RGL Management alleges Hargreaves continued to recommend the Woodford fund up to its collapse despite being aware of the fund's portfolio diversification and liquidity problems. It is also claiming damages over the loss of the opportunity of investing in alternative investments.
"With claims against Link no longer possible, the RGL Group's claim against HL (Hargreaves Lansdown) is now the only route for investors to claim the full redress they are owed," said Michael Green, RGL Management's director.
RGL said its no-win-no-fee case was now fully funded.
Some investors had labelled the Link settlement, which was backed by the Financial Conduct Authority (FCA), woefully inadequate and set at a fraction of the 1 billion pound redress they were seeking. But an overwhelming majority voted for a guaranteed settlement last December.
The FCA said earlier this month that Neil Woodford, the former star stock picker who ran the fund, had a "defective and unreasonably narrow" understanding of his responsibilities as it published warning notices against Woodford and his Woodford Investment Management company (WIM).
Woodford and WIM are challenging the findings.
($1 = 0.8094 pounds)