The UK’s Financial Conduct Authority claimed today that its oversight of the hedge fund manager Crispin Odey has been “intensive” and that sexual misconduct should disqualify managers as “fit and proper”.
But in a letter to the Treasury select committee the FCA’s chief executive admits the multiple sexual misconduct allegations first reported by Tortoise are not the focus of its current Odey investigation.
The investigation focuses instead on related but separate allegations that Odey dismissed an executive committee “for an improper purpose”. The FCA’s supervision of Odey’s firm, Odey Asset Management (OAM), is meanwhile focused on whether adequate steps have been taken to protect its investors, the letter from Nikhil Rathi states.
Odey was acquitted of sexual misconduct in a 2021 trial but accused again last December by five women in a Tortoise podcast, Octopus: The allegations against Crispin Odey. Further allegations were reported by Tortoise and the FT last month.
Several OAM funds have since been closed. Banks including Goldman Sachs and JP Morgan have withdrawn prime brokerage services while asset managers including Schroders and Canada Life have cut ties.
Odey denies the allegations but the firm he founded in 1991 ousted him last month.
In his letter Rathi acknowledges: “It should not require… the bravery of a few or the professional work of investigative journalists for a culture of decency to prevail” in the financial services industry.
He writes that he has been “deeply moved” by the testimony of victims of sexual misconduct and makes clear that such behaviour is “relevant to assessments of fitness and propriety” and “can amount to a breach of our conduct rules”. The sexual misconduct claims are not the focus of the FCA’s investigation, however, which Rathi says is not an alternative to criminal prosecution.
He writes that “anyone who may be a victim of, or witness to, crime to consider going to the police”.
The letter to Harriett Baldwin MP, chair of the committee, is the FCA’s first attempt to set out the scale of its oversight of Odey and his firm, which went largely unsanctioned until last month’s allegations of sexual misconduct by 13 women in all.
In the past seven years the FCA has publicly banned a total of seven individuals from working in financial services for non-financial misconduct. Five of those cases involved sexual misconduct. One followed a conviction for grievous bodily harm. The seventh was for non-payment for a railway ticket.
The FCA was approached for comment.
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.
11 June 2023 – Odey Asset Management seeks to end “personal and economic involvement” with its founder.
Further listening: this week’s Slow Newscast Crispin Odey: The Octopus’s world tells the story of why the FCA, the police, and many of Odey’s former colleagues all have questions to answer.
Photograph Hollie Adams/Bloomberg via Getty Images