The Financial Conduct Authority was made aware of concerns with Neil Woodford’s now collapsed investment business but failed to act for almost two years.
The disgraced former stock picker was forced to suspend his flagship fund in June 2019 sparking a scandal that rocked the investment industry.
Concerns over the strategy were raised in 2015, just a year after its launch, when chief operating officer Nick Hamilton and chief legal and compliance officer Gray Smith resigned.
Smith and Hamilton were then asked to take part in exit interviews with the City regulator, according to the Financial Times. Hamilton and Smith were reportedly concerned with the amount of money being committed to unlisted companies, but the FCA did not act on the information they presented.
“It is true that the FCA did not approach us after the interviews, and I am sure would have approached us had there been any concerns raised from the interviews,” a spokesperson for Woodford said.
Neil Woodford recently apologised for the collapse of the investment firm while announcing comeback plans to launch a new biotech-focused outfit in Jersey and Buckinghamshire.
The comeback has angered savers he left out of pocket and the FCA has issued a stern warning, announcing it will perform what amount to character assessments as part of the decision whether to grant the venture.
The allegations the regulator failed to act on Woodford earlier come amid a difficult time for the FCA, which is already facing scrutiny for its handling of London Capital & Finance’s collapse.
A recent review found the regulator had been a “broken machine”. It found that former chief executive Andrew Bailey, who is the Bank of England’s Governor, and the FCA’s executive committee were responsible for deficiencies that led to LCF’s collapse.
The FCA was approached for comment.