Britain’s monetary watchdog will ban Crispin Odey from the sector and positive the hedge fund founder £1.8mn for a “lack of integrity” in his conduct after he confronted allegations of sexual harassment and assault.
Odey, who based Odey Asset Administration in 1991, “intentionally sought to frustrate OAM’s disciplinary processes into his conduct to guard his personal pursuits”, the Monetary Conduct Authority said on Monday.
Odey, a former Conservative social gathering donor and Brexit supporter who made his title betting in opposition to British banks within the 2008 monetary disaster, fell from grace after the Monetary Occasions detailed allegations of sexual harassment and assault in opposition to him over a interval of a few years. He has strenuously disputed the allegations.
The hedge fund boss will problem the FCA’s resolution, which is provisional, by referring it to the Higher Tribunal, a superior court docket of report that has equal standing to the Excessive Courtroom.
The watchdog’s motion was not primarily based on the sexual misconduct accusations in opposition to Odey themselves, however on his alleged makes an attempt to frustrate the hedge fund’s efforts to deal with complaints about his behaviour and convey disciplinary proceedings in opposition to him.
The FCA mentioned the hedge fund govt “demonstrated that he’s not a match and correct particular person to carry out any operate associated to regulated actions” after he “confirmed reckless disregard” for his firm’s governance and induced it to breach regulatory necessities.
Odey didn’t reply to a request for remark.
Between December 2021 and March 2022, Odey twice fired all of OAM’s govt committee after they deliberate disciplinary hearings about his behaviour, making the most of his majority shareholding within the enterprise to switch them with himself, the FCA mentioned.
After changing the executives for the primary time, Odey “indefinitely postponed” a disciplinary listening to into his conduct, saying he was “unable to conduct it with impartiality”, the FCA mentioned, including that his behaviour in the direction of the fund and the regulator “lacked candour”.
“A tradition of silence wherein allegations of misconduct will not be handled successfully can put shoppers and markets in danger,” mentioned Therese Chambers, joint govt director of enforcement and market oversight on the FCA.
“Odey repeatedly sought to evade and impede efforts to carry him to account,” mentioned Chambers. “His lack of integrity means he deserves to be banned from the trade.”
Odey waived his proper to make representations to the FCA’s regulatory choices committee, which determined his punishment. He as an alternative referred the matter on to the courts, permitting him to carry again his authorized arguments till the civil trial on the Higher Tribunal.
Odey final week made an unexpected visit to the London courtroom the place former Barclays boss Jes Staley is difficult the UK monetary regulator’s resolution to positive and ban him over allegations he performed down ties to the late intercourse offender Jeffrey Epstein.
The FCA often solely takes motion in opposition to folks it deems to not be match and correct due to non-financial misconduct as soon as they’ve been convicted or findings have been made in that regard.
In Odey’s case, it has taken motion over alleged company governance failings in relation to disciplinary proceedings, reasonably than on any underlying allegations themselves.
The discover of the choice printed by the FCA on Monday units out how, in 2020, the hedge fund’s govt committee investigated allegations of sexual harassment and assault by Odey on feminine members of employees, together with “improper bodily contact”, making “sexualised” feedback and issuing invitations to lunches and buying journeys.
The manager committee discovered the behaviour was “inappropriate” and broke its personal insurance policies, however after Odey confirmed “indicators of contrition” it determined he had not breached FCA guidelines and remained a match and correct chief of the agency.
The committee issued Odey with a last written warning for misconduct in 2021, requiring him to adjust to its guidelines and behave professionally with all employees or he could be ousted, which he signed.
The warning alluded to a local weather of worry, saying that as a result of “of a need to not ‘ruffle feathers’ or due to considerations that nothing could be accomplished . . . [some] staff would reasonably say nothing and even resign as an alternative of lodging a criticism”.
When the committee subsequently investigated alleged breaches of its guidelines, it made contingency plans for Odey’s potential alternative and recommended he work remotely, which prompted him to threaten “winding down the agency”, the FCA mentioned.
Odey expressed contempt for distant or separate work preparations proposed by the committee, calling them “fucking spineless” and saying human sources legal guidelines “didn’t matter right here”, the FCA mentioned.
The FCA listed a number of guidelines Odey induced his hedge fund to breach. They included that it have to be managed by at the very least two individuals of fine reputation, preserve its danger administration separate from different operations, and assess its chief’s health and propriety at the very least yearly below the UK’s senior managers and certification regime.
Odey usually blamed and threatened the FCA, the watchdog added, saying on one name with an official: “You’ll not get away with this — I’ve an settlement then you definitely little guys, making an attempt to do your work within the shadows. You’re about to create a disaster . . . I’ll stroll and go away you to wash up the mess.”
OAM “is presently in wind-down and has been rehousing funds and transferring sure fund administration actions to different asset managers”, the FCA mentioned.
The hedge fund founder has not been authorised by the FCA to hold out any regulated monetary companies exercise since 2023, whereas his agency had its authorisation eliminated final 12 months. OAM managed $13.3bn in belongings at its peak.
The FCA’s proposed ban on Odey comes as it really works to tighten tips on how monetary establishments ought to sort out misconduct resembling bullying and sexual harassment. Final week it mentioned the proposals had been delayed and would now be printed by June.
Odey is combating a private harm declare in a civil court docket filed by 5 of his alleged victims. He’s contesting the claims and has additionally issued a libel declare in opposition to the Monetary Occasions, which the FT is defending.
