Crispin Odey staged a coup on Christmas Eve 2021 to oust the firm’s executive committee in order to avoid a disciplinary hearing into sexual misconduct and the Financial Conduct Authority, informed of his plan, did not intervene.
On another occasion, when Odey dismissed other executives seeking to hold him to account, the FCA permitted him to run the firm for a grace period without the governance in place that its own rules require even though it was aware of the allegations and conducting its own investigation into him.
The FCA, which regulates conduct and behaviour in the financial services sector, has been called to Parliament next month to account for the apparent multiple missed opportunities to intervene at Odey Asset Management. The hedge fund company that managed £4 billion is now being dismantled following allegations of sexual misconduct against its founder Crispin Odey published by Tortoise and the Financial Times.
Sexual misconduct falls in the FCA’s regulatory scope when deciding whether a person is “fit and proper” to work in the industry.
Odey was charged with sexual assault in July 2020. As he was in a senior management role that required FCA approval, Odey Asset Management informed the regulator of the criminal case against him.
The FCA was then informed of an internal investigation into Odey that began in October 2020, after an employee made a sexual harassment complaint against him.
Under internal pressure, Odey left his chief executive position in November 2020, moving to a role in the firm where he required FCA approval to one where his suitability was certified by the firm.
In January 2021, the firm gave the FCA a copy of the internal investigation’s report, which supported allegations of sexual misconduct.
The FCA was informed that the executive committee was considering dismissing Odey from the partnership.
As Odey was contrite and showed a willingness to comply with new disciplinary measures, the firm gave him a financial penalty and a final written warning, which he signed. The FCA was informed of these disciplinary outcomes.
Odey was acquitted of his sexual assault charge in March 2021.
A second internal investigation into new allegations of sexual harassment, conducted over late-summer 2021, found Odey had broken the conditions of his final written warning. The FCA was informed and then, in October 2021, it wrote to Odey to state that it opened an investigation into the allegations against him.
By this point, the FCA had been informed of sexual misconduct allegations against Odey stemming from a criminal case and from two internal investigations. It had been informed, for the second time, that the executive committee was considering dismissing Odey from the partnership.
Odey threatened to file a judicial review of the FCA’s decision to investigate him, but then decided against it, fearing a lawsuit would make the investigation public.
The firm’s executive committee informed the FCA that Odey was planning to dismiss it to evade a disciplinary hearing on his alleged misconduct, scheduled for 6 January 2022, as uncovered in the second internal investigation.
On Christmas Eve 2021, Odey dismissed the executive committee, which was possible because of his 75 per cent ownership of the firm. He then placed himself as the sole executive committee member.
As Odey needed the FCA approval he had given up in November 2020 to sit on the executive committee, he asked the firm’s head of compliance to sign off on his application for it. The individual refused and then resigned.
Odey decided to sign off his own application for FCA approval, but then withdrew it, fearing it would be rejected. He instead appointed two partners in the firm to the executive committee.
The FCA agreed with the new executive committee to delay the disciplinary hearing scheduled for 6 January 2022 until the regulator concluded its own investigation into Odey.
Over March and April, Odey pressured the executive committee to hold a sham disciplinary hearing. The executive committee refused, and Odey dismissed this second executive committee.
Odey Asset Management was left out without an executive committee – a breach of FCA regulations, which state businesses must be managed by at least two individuals.
The FCA allowed Odey a grace period in which he can find and appoint senior executives from outside the firm. Odey promised the regulator the process would be complete by the end of summer. He failed to do so.
In June 2022, Odey appointed Peter Martin, a fund manager, and Michael Ede, chief financial officer, to the executive committee. Neither individual was a partner, which the firm had always considered to be the level of seniority required for a place on the executive committee.
The FCA interviewed Martin and Ede and found them competent for the role.
Martin and Ede held the long-delayed disciplinary hearing into Odey, clearing him to continue working at the firm and authorising him as a “certified” individual with the FCA.
The FCA interviewed Odey in late-summer 2022. Odey has confirmed that he was “cross-examined” by the regulator, and told journalists that the misconduct allegations against him were either untrue or that his relations with women had at the time been “consensual”.
In December 2022, Tortoise reported five women’s allegations of sexual assault against Odey, including one that allegedly occurred at the firm’s offices, and one allegation of sexual harassment by a former receptionist.
Tortoise also reported the existence of the first internal investigation and suggestions of an FCA investigation. At the time, the FCA refused to confirm or deny to Tortoise that it was investigating Odey and Odey Asset Management.
The FCA declined to comment on the events in this report.
In March 2023, the FCA changed the scope of its investigation, broadening it out from sexual harassment allegations against Odey to corporate governance failings at the firm.
The FCA interviewed current and former partners of the firm about its corporate governance in May 2023. That is, a year and a half into its investigation of Odey. Some interviews lasted for hours and were spread over two days.
A few weeks later, in June 2023, the Financial Times and Tortoise published allegations that Odey abused or harassed thirteen women over 25 years.
Odey has strenuously denied all the allegations against him. Odey Asset Management has said it takes allegations of this nature seriously.
Within a week, the company’s prime brokers – JPMorgan, Morgan Stanley, Goldman Sachs and BNP Paribas’ Exane – began cutting ties with the company, clients began withdrawing their funds, Odey was dismissed, and the company he founded in 1991 was dismantled.
The FCA has yet to conclude its investigation into the firm or Odey, which can result in fines or a ban from working in financial services.
Odey still appears as an individual “certified” by his firm on the Financial Services Register, a public record of regulated firms and individuals, which says there is no disciplinary or regulatory action against him.
The story of the story
5 December 2022
Octopus: the allegations against Crispin Odey, a Tortoise podcast, sets out claims of sexual misconduct by one of Britain’s richest hedge fund managers, made by five women who knew or worked for him.
8 June 2023
11 June 2023
Odey Asset Management seeks to end “personal and economic involvement” with its founder.
14 June 2023
Tortoise reveals how Odey evaded scrutiny – by sacking the executives he appointed to monitor his behaviour, with regulators failing to intervene.
Photograph PA Images/ Alamy