At 21.33 hours on 28 February 1943, U-405 fired a spread of two torpedoes at a ship in convoy HX-227 about 250 miles east of Cape Farewell, but missed and heard two detonations after seven minutes on a ship beyond. The Wade Hampton (Master John Lloyd Reynolds) had straggled eight miles behind convoy in order to secure the deck cargo and lifeboats in heavy weather when she was struck on port side by two torpedoes opposite #5 hold. The explosions broke the shaft, blew away the #4 and #5 hatches and carried away the entire stern, killing four armed guards. Both holds and the engine room flooded, forcing the eight officers, 36 crewmen and 31 armed guards (the ship was armed with one 4in, one 3in and eight 20mm guns) on board to abandon ship in four lifeboats and five rafts. At 14.19 hours on 1 March, the U-boat spotted a disabled ship and saw it sinking about 6 hours later, this was very likely the wreck of Wade Hampton. The two PT boats RPT-1 and RPT-3 (each 35 tons) carried as deck cargo were lost with the ship.

Around 00.30 hours on 1 March, the corvette HMS Vervain (K 190) (Lt H.P. Crail, RNR) picked up the main group of survivors from two lifeboats and shortly afterwards the men in a third boat. Early the next morning, she also located six men in #3 lifeboat, that had been launched without authorization and spilled some men into the sea when it swamped and drifted away. The corvette also rescued three men from a raft as well as one armed guard wearing his rubberized suit, life preserver and red light. At dawn, the master and the chief engineer were taken off the still floating Wade Hampton by a dinghy from HMS Vervain (K 190), which then continued her search for survivors but no more were found. On 3 March, HMS Beverley (H 64) (LtCdr R.A Price, RN) found a small raft with able seaman Rexford Dickey and the boatswain, but the latter was already dead from exposure. 20 armed guards and 10 crew members were transferred to the British steam merchant Bayano and 10 crew members to the Santa Catalina after the corvette returned to the convoy and all survivors were subsequently landed at Liverpool on 6 March. In total, three crew members and five armed guards were lost.