Crispin Odey Threatened to 'Shut Down' Hedge Fund to Prevent Board Removal
Disgraced financier Crispin Odey threatened to "shut down" his eponymous hedge fund if its board attempted to dismiss him or proceeded with investigations into his alleged misconduct against his wishes, according to court documents filed by the Financial Conduct Authority (FCA). The revelations emerge as Odey faces the City watchdog at the High Court this week, seeking to overturn a ruling that imposed a hefty £1.8 million fine and a ban from working in the financial services industry.
FCA Details Odey's Aggressive Tactics to Thwart Investigations
In its arguments to the court, the FCA claims that Odey used his powers as the majority shareholder to summarily dismiss the firm's executive committee and appoint himself as the sole member in January 2022. This move was aimed at preventing a disciplinary hearing regarding alleged misconduct. The City watchdog characterizes this as a "serious step" that "plunged the firm deeper into a regulatory and governance crisis." The action led to the resignations of two of the three members of the dismissed executive committee, including CEO Tim Pearey, head of research Lord Massey Roborough, and eventually head of compliance Jack Satt.
The firm concluded that Odey had committed "technical" breaches of his first written warning and had been "disingenuous" with the CEO. As a result, he was required to undergo compulsory training and was subjected to a one-year management embargo. Odey is now seeking to overturn the FCA's ruling at the Upper Tribunal, with a three-week trial commencing on Tuesday before a panel of judges.
Background of Allegations and Internal Disciplinary Processes
Odey's troubles escalated after revelations that more than a dozen women accused him of sexual assault, claims he has denied as "rubbish." He faced a criminal charge in 2020 after the Crown Prosecution Service charged him with indecent assault relating to a 1998 incident, but he was later acquitted. Subsequently, he underwent two primary internal disciplinary processes at Odey Asset Management, which he founded in 1991, before investigations by the Financial Times and Tortoise Media.
The first probe, initiated in August 2020, followed a complaint from a female ex-employee alleging sexual harassment. In February 2021, the executive committee issued him a final written warning. However, after another round of allegations in late 2021 involving a temporary receptionist, the firm sought a second round of investigations. Odey twice dismissed the firm's committees to block these probes. The FCA opened a formal investigation into Odey in October 2021.
Historical Allegations and FCA's Stance on Culture
FCA court documents note that a report by law firm Simmons & Simmons in early 2021 identified at least 46 historical allegations of inappropriate conduct by Odey toward female employees between 2003 and 2020. This includes an allegation of sexual assault on a female employee at the firm's premises. The FCA argued that Odey's actions risked "entrenching a culture" in which such behavior was normalized and staff felt deterred from speaking up. In March of last year, the financial watchdog cited Odey's "lack of integrity" in its decision to impose the fine and ban.
Odey was removed as a "person with significant control" in June 2023 and dropped as a director in the same month, but he rejoined the hedge fund a year later. He accuses the FCA of treating his case as "totemic" and as an opportunity to burnish its new ability to investigate non-financial misconduct.
Upcoming Trial and Legal Representation
During the three-week trial, set to conclude on 26 March, numerous former senior members of Odey Asset Management are expected to testify. Odey himself is scheduled to appear from 24 to 26 March and face more than 12 hours of questioning. He will be represented by Alisdair Williamson KC of Three Raymond Buildings and Jason Mansell of QEB Hollis Whiteman, instructed by Kingsley Napley partner Jill Lorimer. The FCA legal team has instructed Clare Sibson KC, Simon Paul of Fountain Court, and Lara Hassell-Hart of 4 Stone Buildings.
