The Monetary Conduct Authority has issued Hyperlink Fund Options a draft Warning Discover with a proposed penalty of £50m over its dealing with of the LF Woodford Fairness Earnings Fund.
The FCA has been investigating the circumstances resulting in the suspension of the fund.
A draft Warning Discover is a step within the FCA’s enforcement course of and gives Hyperlink with the chance to come back to an settlement with the regulator to resolve the case.
The discover features a proposed penalty of £50m however the regulator mentioned Hyperlink might obtain a reduction for immediate settlement.
It additionally units out the idea for redress funds Hyperlink could possibly be required to pay of as much as £306m.
The FCA mentioned the potential redress determine displays its present view of Hyperlink’s failings in managing the LF Woodford Fairness Earnings Fund. FCA-determined redress relies on misconduct fairly than any losses attributable to fluctuations in market worth or value of investments.
It doesn’t mirror any quantity with could also be owed by another firm or particular person because of potential wrongdoing by different events.
The regulator added that there are a number of events presently beneath investigation in relation to the circumstances that led to the suspension of the LF Woodford Fairness Earnings Fund and that these investigations are ongoing.
Hyperlink has 14 days to reply to the discover from the regulator earlier than it goes to the FCA’s Regulatory Choices Committee and thru the Higher Tribunal.
The FCA has positioned a situation on its approval for the acquisition, requiring Dye and Durham to make funds accessible to satisfy any shortfall inside LFS within the quantity accessible to cowl any redress funds LFS could also be required to make, as much as £306m.