Crispin Odey threatened to ‘shut down’ fund if board tried to oust him
Crispin Odey threatened to “shut down” his eponymous hedge fund if he was dismissed by its board or it proceeded with investigations into his alleged misconduct against his wishes, a court will be told.
Disgraced financier Odey faces the City watchdog at the High Court this week as he seeks to overturn a ruling that slapped him with a hefty fine and ban from working in the financial services industry.
In the FCA arguments to the court, the watchdog claims that, to prevent a disciplinary hearing in January 2022 regarding alleged misconduct, Odey used his powers as the majority shareholder to summarily dismiss the firm’s executive committee and appoint himself as the sole member.
The City watchdog characterises this as a “serious step” that “plunged the firm deeper into a regulatory and governance crisis”.
It resulted in the resignations of two of the three members of the dismissed executive committee, including chief executive officer Tim Pearey, head of research Lord Massey Roborough, and, in due course, head of compliance Jack Satt.
The firm concluded Odey had committed “technical” breaches of his first written warning and had been “disingenuous” with the CEO. 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, which kicks off its three-week trial on Tuesday in front of a panel of judges.
Odey was rocked after revelations that more than a dozen women had accused the manager of sexual assault. He has denied the claims, calling them “rubbish”.
Odey to take the stand
Crispin had faced a criminal charge in 2020 after the Crown Prosecution Service (CPS) charged Odey with indecent assault relating to an incident in 1998, but he was later acquitted.
He then faced two primary internal disciplinary processes at Odey Asset Management, which he founded in 1991, before the Financial Times and Tortoise Media conducted an investigation.
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 probes, but Odey twice dismissed the firm’s committees.
The Financial Conduct Authority (FCA) opened a formal investigation into Odey in October 2021.
Odey was removed as a “person with significant control” in June 2023 and dropped as a director in the same month. However, he rejoined the hedge fund a year later.
In FCA’s court documents, it is noted 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 behaviour was normalised and staff felt deterred from speaking up.
The financial watchdog, last March, cited Odey’s “lack of integrity” in their decision to slap him with a £1.8m fine and a ban from working in the industry.
Odey accuses the FCA of treating his case as “totemic” and as an opportunity to burnish its new ability to investigate non-financial misconduct.
During the three-week trial, set to conclude on 26 March, numerous former senior members of Odey Asset Management are expected to testify, with Odey himself scheduled to appear from 24 to 26 March and face more than 12 hours of questioning.
Odey will be represented by Three Raymond Buildings’ Alisdair Williamson KC and QEB Hollis Whiteman’s Jason Mansell, instructed by Kingsley Napley partner Jill Lorimer.
The FCA legal team has instructed Fountain Court’s Clare Sibson KC, Simon Paul, and 4 Stone Buildings Lara Hassell-Hart.