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The Minister with responsibility for financial services in Jersey says he doesn’t want a disgraced fund manager to be given the green light to set up a new business in the island, until a probe into his previous collapsed venture has been completed.
Despite having received zero approval from Jersey’s financial regulator, former star stock-picker Neil Woodford told a national newspaper on Sunday that he would be setting up biotech-focused ‘Woodford Capital Management Partners’ in Jersey and Buckinghamshire.
The announcement came 18 months after the explosion of his £3bn venture led to losses for hundreds of thousands of people, with around £200m of investors’ cash still to be returned.
The UK’s Financial Conduct Authority started an investigation shortly before the collapse, but is still yet to publish its findings. In the meantime, Mr Woodford remains registered to work in the industry.
News of Mr Woodford’s new Jersey venture sparked fury from former investors and industry campaigners, while Jersey’s financial regulator said on Wednesday that it was “disappointed” to see the announcement before having received or approved any paperwork. The name ‘WCM Partners (Jersey) Limited’ has, however, been reserved.
Pictured: Hundreds of thousands of investors lost money when Mr Woodford's previous venture fell apart.
Senator Ian Gorst - whose title will soon be changed to Minister for External Relations and Financial Services to fully reflect his portfolio - has now expressed his own displeasure at the idea of any venture being set up before the investigation closes.
“Jersey’s independent financial regulator, the Jersey Financial Services Commission, has received no application for a fund involving Mr Woodford. If such an application were received, the Commission would review it in line with its obligations to protect the integrity of Jersey in any commercial and financial matters,” Senator Gorst said.
“As Minister with political responsibility for financial services, I would be dismayed if such a fund were to be authorised before the proper resolution of any outstanding regulatory matters in the UK, which Mr Woodford is subject to.”
The blow landed as UK Treasury Committee Chair Mel Stride MP demanded an end date to the Woodford investigation.
Pictured: Treasury Committee Chair Mel Stride MP. (House of Commons)
He commented: “The previous Treasury Committee was vocal in its concerns regarding the failure of the Woodford Fund and the impact on its investors.
“As the FCA’s investigation still continues over 18 months after the fund was suspended, the reports of the new fund may understandably be of concern to investors who previously lost out.
“The FCA should set out when we can expect its investigation to conclude.”
He added that his committee had noted the FCA’s pledge to share information with the Jersey Financial Services Commission.
Mr Stride also pledged to consider a letter calling for an independent review into what went wrong with the Woodford fund - which fell apart after serious concerns arose over listings it had on the Guernsey stock exchange - from campaigners Gina and Alan Miller.
Our Open letter from @True_and_FairUK to @CommonsTreasury calling for an Independent Inquiry into #Woodford scandal
— Gina Miller (@thatginamiller) February 16, 2021
"We urge you...to act with haste as Mr Woodford & @TheFCA actions discredit both the regulator and the UK FS sector. The British public deserve much better." pic.twitter.com/8wOqjjqION
On behalf of the True and Fair Campaign, hey described the apparent lack of progress in the FCA investigation as “nothing short of an insult to the hundreds of thousands of small investors whose lives have been turned upside down, many of which have lost their life savings.”
“The narrow scope of the investigation and its lateness makes any findings the FCA now comes up with woefully late and utterly meaningless,” they added.
The letter went on to describe the decision to allow Mr Woodford to remain on the FCA’s register - allowing him to continue investment business - as “shameful” and said that it “makes a complete mockery” of the new set of codes in the UK aimed at raising the bar in terms of finance managers’ conduct and making management accountability more “rigorous and transparent”.
It said it was “high time” for an independent investigation “so that important lessons can be learned”, adding: “Too often the perpetrators of financial wrongdoing seem to slip off the hook, many to start up new lucrative operations while it is ordinary savers who suffer the brunt of this wrongdoing.”
The letter concluded: “At a time when public policymakers should be encouraging the public to save, it is simply unacceptable that major investigations such as the one into Woodford are being delayed in this way. We believe it ought to be a very serious source of public policy concern that high profile individuals such as Mr Woodford can be allowed to recommence trading, with the slate ostensibly wiped clean, when over 300,000 people some of whom may be your own constituents, are scrabbling to make ends meet after seeing their life savings decimated and their prudent actions and hopes for a secure and comfortable future suddenly and unexpectedly dashed.
“We urge you and your colleagues to act with haste as Mr Woodford and the FCA’s actions discredit both the regulator, and the entire UK financial services sector at a time when trust in the sector has rarely been more crucial. The British public deserve much better.”
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