The City watchdog has provisionally banned former star fund manager Neil Woodford and fined him and his former fund company almost £46m.
The Financial Conduct Authority (FCA) said it planned to prevent Mr Woodford from holding senior manager roles and managing funds.
The watchdog also aimed to fine him £5.89m and Woodford Investment Management (WIM) £40m related to its collapse in 2019.
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Mr Woodford’s flagship fund, Woodford Equity Income (WEI), was wound down after investors tried to withdraw cash faster than the fund could pay out, amid concerns over its high exposure to illiquid and unquoted shares.
The FCA determined that Mr Woodford and the fund “made unreasonable and inappropriate investment decisions” between July 2018 and June 2019.
The fund’s sale of liquid assets and acquisition of illiquid ones meant WEI was unable to meet rules in place at the time, whereby investors should have been able to access their funds within four days.
“WIM and Mr Woodford did not react appropriately as the fund’s value declined, its liquidity worsened and more investors withdrew their money,” the FCA said.
“The FCA has concluded that Mr Woodford held a defective and unreasonably narrow understanding of his responsibilities.”
Steve Smart, its joint executive director of enforcement and market oversight, added: “Being a leader in financial services comes with responsibilities as well as profile. Mr Woodford simply doesn’t accept he had any role in managing the liquidity of the fund.
“The very minimum investors should expect is those managing their money make sensible decisions and take their senior role seriously.
“Neither Neil Woodford nor Woodford Investment Management did so, putting at risk the money people had entrusted them with.”
Both Mr Woodford and WIM have referred the case to the Upper Tribunal for appeal.
He was yet to comment.
Mr Woodford was once considered the star stock picker of his generation.
He launched his own investment business after building up a reputation for delivering stellar returns while at Invesco Perpetual.
At its height in 2017, the Woodford Equity Income Fund had a value of over £10bn, but by the time of its suspension in June 2019, this had sunk to as low as £3.7bn.
While a redress scheme enabled investors to get some cash back, around 300,000 people lost money through the fund’s collapse.