Woodsford Brings Together Over 200 Institutional Shareholders To Seek Redress From London-Listed Issuer

In 2020 Woodsford organised a group of over 200 institutional shareholders to seek redress from a FTSE 100 London-listed issuer. The need for redress from the issuer arose from significant losses that the group of shareholders had sustained when the issuer’s share price crashed after it announced to the market that it had discovered an accounting irregularity, causing it to revise its profit forecasts.

The group of shareholders included many of the world’s largest pension funds, sovereign wealth funds, and endowment funds representing some of the largest asset managers in the world by AUM.

Woodsford identified the opportunity and developed the claim internally. We then selected and approached the lawyers and firms with the relevant, appropriate expertise and selected a well-regarded team at a leading City of London firm to handle this claim.

After initial engagement with the issuer failed to resolve the matter, the group commenced proceedings in the Financial List of the UK High Court, a specialist forum set up to address the particular business needs of parties litigating on financial matters such as securities litigation. The proceedings were brought under section 90A of the UK’s Financial Services and Markets Act 2000 (FSMA), on the basis that:

• the issuer had published untrue or misleading statements, made dishonest omissions and/or delayed publishing required information pursuant to Schedule 10A of FSMA over a substantial period of time; and

• members of the group had acquired and/or continued to hold shares in the issuer in reasonable reliance on such published information and suffered loss as a result; and/or

• suffered loss as a result of the issuer’s delay in publishing information to which Schedule 10A of FSMA applies.

Shortly after commencement of the proceedings, the issuer initiated settlement discussions and the matter settled on confidential terms without the need for contested litigation.

In addition to obtaining compensation for institutional shareholders and their stakeholders, such engagement acts as a strong deterrent to issuers and improves the proper functioning of the market, ensuring that shareholders’ ESG concerns are taken seriously by corporate issuers.