Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Britain’s financial watchdog will ban Crispin Odey from the sector and fine the hedge fund founder £1.8mn for a “lack of integrity” in his conduct after he faced allegations of sexual harassment and assault.
Odey, who founded Odey Asset Management in 1991, “deliberately sought to frustrate OAM’s disciplinary processes into his conduct to protect his own interests”, the Financial Conduct Authority said on Monday.
Odey fell from grace after the Financial Times detailed allegations of sexual harassment and assault against him over a period of many years. He has strenuously disputed the allegations.
The hedge fund boss will challenge the FCA’s decision, which is provisional, by referring it to the Upper Tribunal, a superior court of record that has equivalent status to the High Court.
The watchdog’s action was not based on the sexual harassment accusations against Odey themselves, but on his alleged attempts to frustrate the hedge fund’s efforts to address complaints about his behaviour and bring disciplinary proceedings against him.
The FCA said the hedge fund executive “demonstrated that he is not a fit and proper person to perform any function related to regulated activities” after he “showed reckless disregard” for his company’s governance and caused it to breach regulatory requirements.
Odey did not respond to a request for comment.
The hedge fund boss twice fired all of OAM’s executive committee after they planned disciplinary hearings about his behaviour, taking advantage of his majority shareholding in the business to replace them with himself, the FCA said.
After replacing the executives for the first time, Odey “indefinitely postponed” a disciplinary hearing into his conduct, saying he was “unable to conduct it with impartiality”, the FCA said, adding that his behaviour towards the fund and the regulator “lacked candour”.
“A culture of silence in which allegations of misconduct are not dealt with effectively can put consumers and markets at risk,” said Therese Chambers, joint executive director of enforcement and market oversight at the FCA.
“Odey repeatedly sought to evade and obstruct efforts to hold him to account,” said Chambers. “His lack of integrity means he deserves to be banned from the industry.”
Odey waived his right to make representations to the FCA’s regulatory decisions committee, which decided his punishment but instead referred the matter directly to the courts, allowing him to hold back his legal arguments until the civil trial at the Upper Tribunal.
Odey last week made an unexpected visit to the London courtroom where former Barclays boss Jes Staley is challenging the UK financial regulator’s decision to fine and ban him over allegations he played down ties to the late sex offender Jeffrey Epstein.
The FCA usually only takes action against people it deems to not be fit and proper because of non-financial misconduct once they have been convicted or findings have been made regarding those.
In Odey’s case, it has taken action over alleged corporate governance failings in relation to disciplinary proceedings, rather than on any underlying allegations themselves.
In a letter to MPs in 2023 confirming its investigation into Odey, the regulator said that after separate probes into other people, it had “publicly prohibited seven individuals for non-financial misconduct of various kinds, including sexual assault, possession of indecent images of children, voyeurism, serious assault, non-payment for railway tickets and use of work email to send inappropriate messages”.
It said all but one of those cases involved a criminal conviction or a caution and it was considering six further bans involving criminal convictions “for a wide range of sexual and other offences”.
The FCA’s proposed ban on Odey comes as it works to tighten guidelines on how financial institutions should tackle misconduct such as bullying and sexual harassment. Last week it said the proposals had been delayed and would now be published by June.
Odey is fighting a personal injury claim in a civil court filed by five of his alleged victims. He is contesting the claims and has also issued a libel claim against the Financial Times, which the FT is defending.
The hedge fund founder has not been authorised by the FCA to carry out any regulated financial services activity since 2023, while his firm had its authorisation removed last year. OAM managed $13.3bn in assets at its peak.
Credit: Source link
