FCA to ban Crispin Odey from financial services industry

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, a former Conservative party donor and Brexit supporter who made his name betting against British banks in the 2008 financial crisis, 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 misconduct 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.

Between December 2021 and March 2022, Odey 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. He 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 in that regard.

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.

The notice of the decision published by the FCA on Monday sets out how, in 2020, the hedge fund’s executive committee investigated allegations of sexual harassment and assault by Odey on female members of staff, including “improper physical contact”, making “sexualised” comments and issuing invites to lunches and shopping trips.

The executive committee found the behaviour was “inappropriate” and broke its own policies, but after Odey showed “signs of contrition” it decided he had not breached FCA rules and remained a fit and proper leader of the firm.

The committee issued Odey with a final written warning for misconduct in 2021, requiring him to comply with its rules and behave professionally with all staff or he would be ousted, which he signed.

The warning alluded to a climate of fear, saying that because “of a desire not to ‘ruffle feathers’ or because of concerns that nothing would be done . . . [some] employees would rather say nothing or even resign instead of lodging a complaint”.

When the committee subsequently investigated alleged breaches of its rules, it made contingency plans for Odey’s potential replacement and suggested he work remotely, which prompted him to threaten “winding down the firm”, the FCA said.

Odey expressed contempt for remote or separate work arrangements proposed by the committee, calling them “fucking spineless” and saying human resources laws “did not matter here”, the FCA said.

The FCA listed several rules Odey caused his hedge fund to breach. They included that it must be managed by at least two persons of good repute, keep its risk management separate from other operations, and assess its leader’s fitness and propriety at least every year under the UK’s senior managers and certification regime.

Odey often blamed and threatened the FCA, the watchdog added, saying on one call with an official: “You will not get away with this — I have an agreement then you little guys, trying to do your work in the shadows. You are about to create a crisis . . . I will walk and leave you to clean up the mess.”

OAM “is currently in wind-down and has been rehousing funds and transferring certain fund management activities to other asset managers”, the FCA said.

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.

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.