FCA ban former hedge fund millionaire Crispin Odey for lack of integrity

Crispin Odey, former hedge fund manager, has provisionally been fined £1.8 million and banned from the UK financial services industry by the Financial Conduct Authority (the FCA) for acting with a lack of integrity.  

The FCA’s decision follows an investigation into Odey’s behaviour between December 2021 and November 2022 in which he ‘repeatedly sought to evade and obstruct efforts to hold him to account’ as he used his power to frustrate internal disciplinary procedures. By way of background, complaints of inappropriate sexual misconduct had been made against him by several members of female staff which led to him being issued with a final written warning in February 2021. In November 2021 the executive committee of Odey Asset Management (OAM) scheduled a disciplinary hearing to consider whether Odey had breached the terms of the final written warning. However, on 24 December 2021, Odey used his majority shareholding in OAM to remove existing members of the executive committee ahead of a disciplinary hearing due to take place in January 2022. He then appointed himself as the sole committee member and proceeded to indefinitely postpone his own misconduct hearing as Odey said he would be unable to conduct it himself with impartiality.  

A new executive board was appointed and Odey resigned from executive committee. However, following a disagreement as to how to proceed with the disciplinary hearing, now scheduled to take place in March 2022, Odey again proceeded to remove all members and appoint himself as the sole committee member. He retained this position until July 2022 when he appointed two further members. OAM finally conducted a disciplinary hearing in November 2022, almost a year after it was meant to take place.  

The FCA found that Odey’s actions showed ‘a reckless disregard for OAM’s governance and compliance with regulatory rules and requirements’ and ‘a deliberate intention to limit his own accountability’. The FCA’s decision finds that he failed to act with integrity and therefore is ‘not a fit and proper person’.  

The decision is provisional and has been referred to the Upper Tribunal where Odey and the FCA will present their cases.  

The Birketts view  

This case highlights an increased attention which the FCA is paying to non-financial misconduct and the wider impact that such misconduct can have on consumers and confidence in the financial services industry.  

FCA joint executive director Therese Chambers has reflected that ‘a culture of silence in which allegations of misconduct are not dealt with effectively can put consumers and markets at risk’.  

It is interesting to note that the FCA’s grounds to act were based on failure to follow proper procedures, rather than the allegations of sexual misconduct against Odey, which the FCA elected not to pursue.  

Responsibility to investigate and deal with non-financial misconduct continues to lie primarily with the relevant firm. This example highlights the importance of robust internal investigation procedures. Firms must notify the FCA as appropriate where they take disciplinary action and believe that an individual no longer satisfies the fit and proper test.