The UK’s Financial Conduct Authority (FCA) has decided to ban Crispin Odey, the multi-millionaire founder of Odey Asset Management (OAM), from the financial services industry and issue a fine of £1.8 million.
The FCA cited Odey’s lack of integrity, as well as deliberate attempts to frustrate disciplinary processes to protect his own interest in relation to an ongoing investigation into “inappropriate behavior”.
“Mr Odey showed reckless disregard for OAM’s governance, causing OAM to breach certain regulatory requirements. In addition, the FCA considers that Mr Odey’s behavior towards both OAM and the FCA lacked candor.
“The FCA considers Mr Odey’s conduct demonstrated that he is not a fit and proper person to perform any function related to regulated activities.”
FCA Ban: Odey Appeals
The FCA says Odey has breached the Individual Conduct rule 1, “lack of integrity”.
Odey has referred the FCA’s decision to the Upper Tribunal where he and the FCA will present their cases. The decision notice is therefore provisional and reflects “the FCA’s belief as to what occurred and how it considers his behavior should be characterized”.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA comments: “A culture of silence in which allegations of misconduct are not dealt with effectively can put consumers and markets at risk. Mr Odey repeatedly sought to evade and obstruct efforts to hold him to account. His lack of integrity means he deserves to be banned from the industry.”
FCA Questioned by the Government
The news comes almost two years after an FT investigation reported a series of allegations of sexual harassment or misconduct from women who either worked at the firm or had social or professional dealings with Odey. Odey is taking legal action against the FT Group.
The FCA came under fire too, as MPs on the Treasury Select Committee quizzed the watchdog on how much it knew about the allegations and what action it had taken.
On Oct. 31, 2023, Odey Asset Management announced that it is winding down its business, and the closure and transfers of various funds part of the Odey Group.
Among others, funds were transferred to Lancaster Investment Management, SW Mitchell Capital, Bainbridge Partners and Cannacord Genuity.
Morningstar previously revealed the impact of the FT’s investigation on investor outflows. Two months after the story broke, on June 8, 2023, around £600 million had been pulled from Odey Asset Management strategies. After that, some funds were gated, others closed, and some were kept open in a confusing rush of company updates.
Hearings, Warnings: What Led to Crispin Odey’s Exit?
Morningstar has previously looked at the sequence of events leading up to Crispin Odey’s criminal trial in February 2021, where he was found not guilty of indecent assault.
Meanwhile, the FCA has outlined a timeline of events from the initial internal investigation by Odey Asset Management.
“On 4 February 2021, after an internal investigation by OAM, Mr Odey received a final written warning from OAM’s executive committee (ExCo), in relation to inappropriate behavior.”
The findings of misconduct, detailed in the final written warning, stated that Odey had made inappropriate physical contact with female members of staff; made inappropriate and/or unprofessional comments to female members of staff; and whether intentionally or not, had by his behavior made some members of staff feel uncomfortable.
“On 30 November 2021, OAM scheduled a disciplinary hearing to consider whether Mr Odey had breached the final written warning. However, on 24 December 2021, Mr Odey used his majority shareholding in OAM to remove OAM’s existing ExCo members and appoint himself as ExCo’s sole member. Mr Odey subsequently decided on 6 January 2022 that the disciplinary hearing into his conduct would be indefinitely postponed since he said he was unable to conduct it with impartiality.
“Mr Odey appointed new ExCo members and resigned from ExCo on 12 January 2022. However, following disagreement about how to proceed with the disciplinary hearing, on 31 March 2022 Mr Odey again removed OAM’s ExCo members and appointed himself as the sole member of ExCo. Mr Odey retained his position on ExCo until he appointed 2 new ExCo members on 4 July 2022.
“OAM’s disciplinary hearing was eventually held on 29 November 2022, nearly 1 year after it had been originally scheduled.”
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.
