FCA warns Crispin Odey it will take action after his conduct ‘lacked integrity’

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The UK financial watchdog has warned Crispin Odey that it intends to take action against the hedge fund founder after finding his conduct following allegations of sexual harassment and assault had breached its rules and demonstrated a “lack of integrity”.

The Financial Conduct Authority said on Friday that it had found Odey attempted to “frustrate” a disciplinary process examining his behaviour at his firm.

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 FCA’s findings do not comment on the accusations themselves but centre on Odey’s response to his firm’s attempts to deal with his alleged behaviour and bring disciplinary action against its chief — including twice firing Odey Asset Management’s executive committee members and replacing them with himself.

Odey has the right to respond to the findings outlined in the warning notice by making representations to the FCA’s regulatory decisions committee. It is unclear if he is challenging the watchdog’s decision, which could lead to a public reprimand, a fine or a ban.

Odey did not immediately respond to a request for comment.

Previous FT reporting has detailed how in February 2021 Odey Asset Management’s then executive committee gave the founder of the firm a “final written warning” after an internal report by law firm Simmons & Simmons concluded that he had at times behaved inappropriately with female staff.

The warning banned him from inviting female employees to lunch, communicating with them about non-work matters, and from engaging in unwanted touching.

Later that autumn, the executive committee became aware that Odey had potentially breached the warning, and scheduled another disciplinary hearing. In response, Odey used his majority shareholding of his firm to remove the executive committee members and appoint himself instead on Christmas Eve 2021. The move led more than a third of the firm’s partners to leave.

The FCA’s statement on Friday said its findings were based on Odey’s conduct from that date until November 17 2022, which the watchdog said “showed a reckless disregard” for governance at his firm and caused it “to breach certain regulatory requirements”.

It said his behaviour in this period “lacked candour”, he “used improper means to protect his own interests and achieve his objectives” and his actions were “deliberately designed to frustrate OAM’s ongoing disciplinary process into his conduct”.

The FCA, which began investigating Odey in mid-2021, said his dealings with the watchdog “also support the finding that he lacks integrity”.

The FCA found that Odey breached the first rule in its code of conduct that required him to act with integrity. Neither Odey nor his firm has been authorised by the FCA to carry out any regulated financial services activity since last year.

The watchdog’s notice reveals new details about Odey’s conduct in the face of attempts to challenge his behaviour.

It said that after firing his executive committee, Odey held a committee meeting in January 2022 “for which he was the sole member, [where he] decided that the disciplinary hearing into his conduct would be indefinitely postponed since he said he was unable to conduct it with impartiality”.

He then appointed a new executive committee, but a few months later, after “ongoing disagreement about how to proceed with the disciplinary hearing”, Odey “again used his majority shareholding to remove Odey Asset Management’s executive committee members and appointed himself as the sole member”.

This remained the status quo until July 2022, at which point Odey appointed two new executive committee members and Odey Asset Management veterans, Peter Martin and Michael Ede.

The FCA notice said a disciplinary hearing was eventually held in November 2022, but did not comment on its outcome. The FT investigation was published in June 2023.

Odey is currently 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 FT.