LONDON, June 8 - Britain's Financial Conduct Authority (FCA) said on Monday it has commenced legal proceedings against former fund manager Neil Woodford and the online subscription service W4.0, accusing them of providing regulated investment advice and making financial promotions without the required authorisation.
The FCA said it is seeking an injunction to prevent Woodford and W4.0 - the subscription-based service he launched last year - from carrying on what the regulator described as "the potentially unlawful activities." The action targets both the individual and the platform that operates on a subscription basis.
W4.0 is registered in the United Arab Emirates. The company did not immediately respond to requests for comment regarding the FCA's legal action. On its public website, W4.0 describes its stated purpose as being "to explain active investment strategies" rather than to deliver formal financial advice or to provide investment management services.
The W4.0 website also features a clear statement on regulatory status: "We are not regulated by the FCA or any other regulatory body, and we do not provide financial advice. That That That That "
Regulatory scrutiny of Woodford follows earlier enforcement action. In August, the FCA imposed fines totaling 45.9 million on Woodford and his firm, Woodford Investment Management, over management failures linked to a once-flagship fund that collapsed in 2019.
The FCA's legal move aims to curtail activities it believes fall within the scope of regulated investment advice and financial promotion rules. The regulator's request for an injunction signals a court-based effort to stop the conduct while legal determinations proceed.
Summary
The Financial Conduct Authority has sued Neil Woodford and his subscription service W4.0, alleging unauthorised provision of regulated investment advice and unapproved financial promotions. The FCA is seeking an injunction to prevent what it calls "the potentially unlawful activities." W4.0, registered in the UAE, states on its website that it explains active investment strategies and deliberately does not provide regulated financial advice. Woodford and his former firm were fined a combined 45.9 million in August over failings tied to a fund collapse in 2019.
Key points
- The FCA is suing Neil Woodford and W4.0 for allegedly providing regulated investment advice and making financial promotions without authorisation.
- The regulator is seeking an injunction to stop what it describes as "the potentially unlawful activities."
- W4.0 is registered in the United Arab Emirates and states on its website that it is not regulated by the FCA and does not provide financial advice.
Risks and uncertainties
- It is uncertain how courts will rule on the FCA's request for an injunction and on the underlying allegations - this affects the legal standing of W4.0 and Woodford.
- W4.0's stated unregulated status and the FCA's opposing view create regulatory uncertainty for subscribers and market participants engaging with the service.