The FCA’s Seven-Year Pursuit of Neil Woodford: Regulation by Rear-View Mirror

When the Financial Conduct Authority announced civil proceedings against Neil Woodford and W4.0 this week, the regulator undoubtedly hoped to project strength. The allegations are serious. The FCA claims Woodford and his UAE-based business have been providing regulated investment advice and communicating financial promotions through the subscription platform W4pz.com without authorisation, contrary to sections 19 and 21 of the Financial Services and Markets Act 2000.

The allegations are denied and remain unproven. The courts will ultimately decide whether the FCA is correct.

Yet beyond the legal arguments lies a more awkward question for the regulator itself.

Why does the FCA so often appear to arrive years after the event?

For many investors, Neil Woodford remains a villain. For many others, he remains one of Britain’s most successful fund managers whose reputation was destroyed by a single, highly publicised collapse after decades of success.

What cannot be disputed is that he continues to command attention.

Thousands of investors continue to pay for access to his market views through W4.0. His opinions continue to generate headlines. His investment commentary continues to attract subscribers. In modern language, Woodford has become a finfluencer – not the TikTok variety, but perhaps something more powerful: a former City star whose influence derives from decades of perceived expertise.

That continuing influence appears to be precisely what concerns the FCA.

The regulator’s case centres on two key provisions of FSMA. Section 19 contains the general prohibition against carrying on regulated activities without authorisation. Section 21 prohibits unauthorised financial promotions.

The legal questions are important. But they are also increasingly difficult to answer in a digital world where investment content is delivered through subscription platforms, online communities, podcasts and social media channels that transcend national boundaries.

The FCA appears determined to demonstrate that the existing regulatory framework can still be applied to modern financial influence.

The problem is that many observers no longer have confidence in the regulator’s ability to identify and address emerging risks before harm occurs.

Instead, the FCA increasingly finds itself accused of regulating through the rear-view mirror. Consider the timeline.

The Woodford Equity Income Fund was suspended in June 2019. Millions of pounds were trapped. Thousands of investors suffered losses. The event dominated financial headlines and prompted widespread criticism of fund governance and regulatory oversight.

Yet meaningful enforcement activity concerning Woodford himself emerged years later.

By the time formal proceedings and decision notices appeared, investors had already spent years waiting for answers. The regulator would undoubtedly argue that complex investigations require time. That is true. Due process matters, but there is a difference between careful investigation and institutional delay.

The FCA’s critics argue that lengthy investigations have become a recurring feature rather than an exception.

The London Capital & Finance scandal generated similar criticism. Parliamentary inquiries into British Steel Pension Scheme transfers raised comparable concerns. Questions have repeatedly been asked about whether the regulator was sufficiently proactive in relation to mini-bonds, cryptoassets and high-risk promotions.

The pattern is difficult to ignore.

Problems emerge, warnings accumulate, consumers suffer losses, years pass.

Only then does the regulator arrive with enforcement action.

This is not a criticism that can simply be dismissed as unfair. Public confidence in regulation depends not merely upon punishing wrongdoing after the event but preventing harm before it occurs. That is where the FCA continues to face its greatest challenge.

The proceedings against Woodford also expose another uncomfortable reality. The business at the centre of the dispute is registered in the United Arab Emirates. The FCA can bring proceedings in England and Wales. It can seek injunctions. It can make declarations. It can obtain orders against individuals within its jurisdiction.

What it cannot do is simply extend its regulatory reach across international borders at will.

Any meaningful enforcement against an overseas company may require cooperation from foreign authorities, recognition of court orders and lengthy cross-border legal processes. Such actions are rarely straightforward.

This raises a fundamental question.

Is the FCA pursuing a genuinely effective regulatory intervention or a largely symbolic one?

Supporters of the regulator will argue that alleged breaches cannot be ignored simply because a company is based overseas. That argument has force.

Yet critics may reasonably respond that modern financial services have become international while regulation remains stubbornly territorial. Subscription businesses, investment communities and online influencers can operate globally while regulators remain confined by national jurisdictions.

In that environment, obtaining an injunction may be considerably easier than achieving practical compliance. The irony is difficult to miss.

The FCA has spent years warning the public about finfluencers. It has repeatedly highlighted the dangers of online investment content. It has launched campaigns, published guidance and publicised investigations.

Yet some of the most influential figures continue to attract substantial audiences, Neil Woodford is perhaps the clearest example.

Seven years after the collapse of his flagship fund, thousands still subscribe to his analysis. Whatever one thinks of his record, he retains a level of trust that many regulators would envy.

That trust reflects something deeper than personality, it reflects a growing scepticism about institutional competence.

Many investors no longer assume that regulators are better judges of investment risk than experienced market participants. Fairly or unfairly, every delayed investigation, every missed warning sign and every retrospective enforcement action reinforces that perception.

This is why the current proceedings matter.

The case is not simply about whether Woodford crossed a regulatory line, it is about whether the FCA can demonstrate that it remains capable of regulating modern financial influence effectively.

The regulator may ultimately win.

It may secure its injunction. It may establish useful legal precedent. But even a complete legal victory would not erase a broader concern that has become increasingly difficult to ignore.

The FCA’s greatest problem is no longer a lack of powers.

It is a growing perception that those powers are exercised too slowly, too late and only after public controversy has already exposed the issue.

Until that perception changes, every major enforcement action risks being interpreted not as evidence of regulatory strength but as another example of regulation by rear-view mirror.