Hargreaves Lansdown bosses waive bonuses over Neil Woodford fund fiasco

Hargreaves endorsed the fund, which has now been suspended for two months, to thousands of customers through best-buy lists

Woodford faced another blow on Wednesday after almost £2bn was wiped off the value of one of the largest holdings in his suspended fund (Rex)

Executives at fund supermarket Hargreaves Lansdown will give up their bonuses after hundreds of thousands of customers saw their savings frozen in Neil Woodford’s suspended fund.

Hargreaves' chief executive Chris Hill, Chief financial officer Philip Johnson, chief investment officer Lee Gardhouse and research director Mark Dampier, will take no bonus for 2019, Reuters reported.

Around 300,000 Hargreaves Lansdown customers who ploughed their savings into Woodford's flagship fund have been unable to access their money since June and will be unlikely to do so until at least December.

Hargreaves plugged Mr Woodford's fund through its best-buy list and received fees for referring customers.

The Financial Conduct Authority is probing whether the relationship between fund supermarkets like Hargreaves and fund managers like Woodford is sometimes too close to allow them to remain impartial when creating best-buy lists.

Mr Woodford put money into riskier, unlisted stocks which he couldn't sell fast enough when investors demanded their cash back after the star stock-picker had a long run of poor performance.

He attracted criticism for continuing to charge fees while investors were denied access to their cash.

The fund manager faced another blow on Wednesday after almost £2bn was wiped off the value of one of the largest holdings in his suspended fund.

Shares in Burford Capital, which provides funding for legal action and takes a cut of the resulting settlements, crashed 65 per cent in a day after a US hedge fund called Muddy Waters took out a big bet against the company.

Muddy Waters took out a large short position against Burford and began publicly attacking its financial health.

The move spooked investors, leading to a rapid sell-off and more heavy losses for the Woodford fund and the people who have put their savings into it.

Nick Burchett a fund manager at Cavendish Asset Management said Mr Woodford would be “seething” as Muddy Waters’ tactics.

“While shorting is certainly an important part of the markets when it comes to providing liquidity, this kind of activity can also be harmful to a business’ recovery prospects,” he said.

“This is largely down to the ‘fear factor’.

“Once a company announces that it is hoping to raise funds, shorter sellers are able to jump into gear, while also declaring their reasons for shorting the stock to the wider markets. This can be damaging, not only to the share price, but also to investor confidence.”