Crispin Odey loses challenge over City ban after sexual misconduct allegations

Former hedge fund manager Crispin Odey has lost a legal challenge against the Financial Conduct Authority (FCA) over its decision to ban him from the UK finance industry over the handling of allegations of sexual misconduct against him.

Mr Odey took legal action against the regulator over the ban and its decision to fine him more than £1.8 million in March last year for a “lack of integrity”.

The decision was taken over his handling of disciplinary processes regarding his alleged sexual misconduct at his firm, Odey Asset Management (OAM).

After a hearing earlier this year, the Upper Tribunal dismissed his challenge on Monday, finding that Mr Odey “has been willing either recklessly or deliberately to disregard regulations and structures put in place for the protection of consumers, when he considers it in his interests to do so”.

The FCA told the tribunal in London that a 2021 report published by law firm Simmons & Simmons found at least 46 historical allegations of inappropriate conduct by Mr Odey towards female employees at OAM between 2003 and 2020.

He was later alleged to have breached the terms of a final written warning by sexually harassing a temporary receptionist at the end of 2021.

The authority claimed Mr Odey then twice dismissed members of OAM’s executive committee (ExCo), which was investigating the alleged breach, leaving himself as its sole member and postponing the disciplinary process “indefinitely”.

Its barristers told the hearing that this “amounted to an abrogation of Mr Odey’s duty to act with integrity” and “shows that he is not fit and proper”, meaning the decision to ban him from the City was “reasonably open to it”.

Lawyers for Mr Odey said the former hedge fund manager removed the ExCos because he believed he was facing an unfair process, which would result in his removal from the company.

Mr Odey also denied the allegations, telling the tribunal in evidence that he “could not then, and cannot now, see what other option I had” but to dismiss the ExCos.

In a ruling, Mr Justice Thompsell, Upper Tribunal Judge Rupert Jones and Upper Tribunal member Cathy Farquharson said that they were “satisfied that Mr Odey lacked integrity in each of the ways that the Authority alleges”.

They said: “We are satisfied that Mr Odey’s asserted beliefs or concerns were not the primary nor contemporaneous motives for his actions in removing the ExCos.

“Many of the beliefs he did not even hold at the time, and those that he did were not reasonably held but reflected a warped set of values based on a strong sense of entitlement.”

They continued: “In essence, Mr Odey deliberately frustrated a disciplinary process designed to scrutinise his conduct and uphold OAM’s internal policies and procedures relevant to the performance of regulated activities.

“He was unwilling to submit himself to the jurisdiction of the proper governance of the firm through ExCo, for so long as he believed it would take decisions with which he, personally, disagreed and were not in his interests.”

They added: “Furthermore, Mr Odey’s evidence in these proceedings has demonstrated that there remains a lack of insight into why his conduct, in particular, in twice removing ExCo, lacks integrity.

“He has expressed no contrition for it. He sees nothing wrong with his approach, and indeed he wrongly sees himself as the victim of both OAM’s actions and the Authority’s.”

They also reduced the fine issued to Odey by the FCA from £1,835,200 to £1,529,374.

In the 229-page ruling, the tribunal also found that Mr Odey’s conduct “risked entrenching an existing culture within OAM, where inappropriate behaviour by him towards female employees had been normalised”.

They also said that “none of Mr Odey’s purported justifications for his conduct provide any reasonable justification for it”.