Paul Myners joins chorus of critics slamming Woodford probe ‘lethargy’

Paul Myners, the former City minister, has joined the growing chorus of voices calling for an independent inquiry into the implosion of Neil Woodford’s investment business, making him the latest high profile figure to criticise the UK’s financial watchdog over its handling of the scandal.

Lord Myners, who served in Gordon Brown’s Labour government during the financial crisis, criticised the Financial Conduct Authority for the length of time it has taken to complete its investigation into the former star fund manager’s business, which was launched just days after Woodford’s £3.1bn flagship Equity Income fund was suspended in June 2019, locking in hundreds of thousands of investors.

“It is extraordinary that the FCA has not completed its report and published its conclusion,” Myners told Financial News.

“There can only be so many questions that need to be asked. The FCA is undermining its own credibility by such lethargy.”

READ Neil Woodford plots comeback after saying ‘sorry’ for fund collapse

Myners, a former fund management chief executive, said an independent inquiry was now needed to resolve the issue.

“We have lost confidence in the FCA marking its own homework,” he said.

Woodford, once one of the UK’s most lauded stock pickers, recently re-emerged with plans to launch a Jersey-based venture called Woodford Capital Management Partners that will target institutional clients.

His bombshell announcement comes 16 months after Woodford Investment Management collapsed in spectacular fashion after his once best-selling investment fund was wound up and he was forced to closed the doors on his business.

Investor champions are furious Woodford is planning a return to fund management before the FCA has delivered the findings from its investigation into the collapse of his last business.

Gina and Alan Miller, wealth managers and founders of the True and Fair Campaign, wrote to the Treasury Committee earlier this week citing “alarming regulatory and public policy implications” arising from Woodford’s planned return to fund management.

READ‘Simply unacceptable’: Outrage in the City over FCA’s delayed Woodford probe as fallen star plots comeback

The couple called on parliament’s Treasury Committee to kick start an independent inquiry, claiming the length of time it has taken the FCA to conduct its probe is an “insult to the hundreds of thousands of small investors whose lives have been turned upside down”.

Mel Stride, the committee’s chair, also pressed the FCA to provide a data by which it expects to finish its investigation.

A spokeswoman for the FCA said it will provide an update to the committee by 31 May.

Woodford ran into trouble after his biggest fund, which invested heavily in startups and unquoted companies, was suspended following a spate of investor withdrawals and to allow him to reposition the portfolio towards more liquid assets.

It is not the first time Lord Myners, who was City minister in Gordon Brown’s Labour government during the financial crisis, has openly criticised the FCA over its handling of the Woodford scandal.

In an interview with the BBC’s Today programme days after Woodford’s fund was suspended in June 2019, Myners claimed the FCA has missed “clear warning signs” that there were problems.

“All the signs were there,” Myners said at the time.

“The FCA said they didn’t know certain things were happening — they were in the newspapers. The FCA should have been awake.”

Following Woodford’s comeback plans, announced last weekend in an interview with the Sunday Telegraph, Jersey’s financial regulator said it was disappointed” the former star fund manager had announced plans for his venture without first seeking authorisation. The Jersey Financial Services Commission said it would be “normal practice” when outlining plans for a new investment business to state that they are “subject to regulatory approval”.

The financial watchdog added that while the trading name WCM Partners has been reserved in the Jersey registry, it has not received an application for it to operate as a firm or investment management company there.

The FCA also pointed out that Woodford would need its authorisation if his new business was to operate in the UK. The FCA added it was in touch with its counterparts in Jersey and willing to share information regarding any authorisation requests it received.

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