Shareholder Spotlight Bonus Edition #3 : Sometimes Legal & General

Let me be blunt. Legal & General is one of those names that sounds respectable, almost paternal. Solid. Staid. You hear it and think pensions, protection, safety nets. But scrape away the corporate polish and what you get is a cocktail of greed, mis-steps, and hypocrisy. This is not the guardian angel of your retirement, it’s a beast that plays both sides of the table, and when the chips fall, it’s never them who loses. It’s you. The customer. The pensioner. The small investor. The worker with decades of graft behind them.

And here’s the kicker: behind the marketing fluff about responsibility and stewardship, Legal & General has been caught out, time and again, in scandals that tell you exactly what their priorities are. Spoiler alert: it isn’t you.

Mis-selling the dream

Roll back to the 1980s and 1990s. Thatcher’s Britain. Workers were sold the promise of personal pensions and endowment mortgages like it was salvation. For millions it turned into betrayal. Industry-wide, 2.4 million people were affected and compensation eventually topped £11 billion. Legal & General was a player in that feeding frenzy and in 2005 they got hit with a £1.1 million fine for mis-selling endowment mortgages. They whined about the regulator’s sample size, dragged it through the appeals process, and got it cut to £575,000. Small change compared to the damage left behind. Nurses, miners, teachers, everyday people misled out of stable occupational schemes into riskier products that lined the City’s pockets.

Call it what it was: a heist dressed up as financial advice.

Property games and locked doors

You’d think a company flogging security would know better than to trap its own customers. But look at their property funds. When Brexit hit in 2016, Legal & General hacked down valuations by up to 15 percent overnight to stop the bleeding. Investors locked in. Then again in 2020, when Covid smashed markets, they straight up suspended trading in their £2.9 billion UK Property Fund. People couldn’t get their money out. These weren’t slick hedge funds playing high stakes poker. These were retail investors and pension savers, frozen out while the suits scrambled.

When push comes to shove, liquidity and promises vanish. The marketing slogan of “long term value” looks a lot like “your money, our rules.”

Globo, Glencore and governance rot

Remember the AIM-listed Greek tech darling Globo? In 2015 it collapsed in flames after admitting cooked books, fake revenues, phantom customers. Legal & General funds had been in deep. Poof, written off to zero. Investors took the hit. This wasn’t some minor startup punt, it was meant to be a serious investment. Due diligence? About as solid as a paper plate in a rainstorm.

Then there’s Glencore, the mining monster. Convicted of bribery and corruption stretching from Africa to South America, paying more than $1 billion in penalties. Legal & General were investors. When the scandal hit and share prices tanked, they joined other funds in suing for damages. So let’s get this straight: you buy into a company built on sleaze, then when it goes public you sue to get your losses back? That’s not stewardship, that’s playing the game with one hand holding the dice and the other writing the rulebook.

Climate double-speak

Legal & General loves to parade its ESG credentials. Annual reports bulging with words like stewardship, sustainability, alignment. They’ve dumped Exxon and some Chinese banks, trumpeting how they punish climate laggards. But scratch beneath the PR veneer and you see the game. They held those stakes for years, profiting handsomely while activists screamed about deforestation, carbon bombs and planetary collapse. Then, when the reputational heat got too much, they bailed out with a flourish and a press release.

It’s greenwashing. Plain and simple. The financial equivalent of a fast-food chain crowing about one vegan burger while shipping container loads of factory farm beef.

Cummins connection

And here’s where it gets especially raw. Legal & General currently holds around 1.3 to 1.6 million shares in Cummins Inc (ticker CMI), worth hundreds of millions. That’s Cummins, the engine giant fined a record $1.675 billion in 2024 for using defeat devices in nearly a million Ram trucks, spewing filth into the air while pretending to play by the rules. Add another $325 million in fixes and you’ve got the biggest Clean Air Act penalty in history.

Yet there it sits in Legal & General’s portfolio. Another company in the Cummins ecosystem with alternative ideas about ethical behaviour. Cheat the tests, poison the air, cash the dividends. And Legal & General? They shrug, pocket the income, and spin a story about “active engagement.” It’s the same pattern we’ve seen again and again.

The failed dreams of modular housing

One last punch to the jaw. Legal & General made a grand entrance into modular homes, promising affordable housing solutions at scale. They hired, they built factories, they sold the dream of solving Britain’s housing crisis. By 2023 it was over. The business shut down, hundreds lost jobs, millions burned. Another case of grand corporate vision turning into dust while communities were left waiting.

Wrapping it up

Add it all together and what do you see? Mis-selling, fund suspensions, fraud write-offs, corruption exposure, greenwashing, failed ventures and dirty investments like Cummins. It’s a pattern, not an accident. A culture that talks about protection but delivers exploitation. A beast that feeds off your money, your trust, your future, and leaves you with scraps.

Legal & General wants you to think of them as guardians of financial security. I see them as scavengers in tailored suits. And until the system stops letting them shrug off fines, settle out scandals, and rebrand failures as lessons, they’ll keep on doing it.

We’re the ones who should be outraged. Because behind every quarterly dividend is a story of someone else’s loss.

Lee Thompson – Founder, The Cummins Accountability Project