CRIMINAL CAPITALI$M

Odey Faces ‘Fit and Proper’ Test as UK’s FCA Contacts Police

FCA Contacts Police Over Odey Sexual Assault Allegations


Jonathan Browning
Wed, July 5, 2023 

(Bloomberg) -- The UK financial regulator said it’s in contact with the police about allegations of sexual assault against Crispin Odey as it investigates whether the hedge fund manager passes its ‘fit and proper’ test to operate in the financial industry.

The Financial Conduct Authority said that as some of the allegations are “potentially criminal” it has been in touch with the police, according to a July 3 letter to UK lawmakers. The FCA is focusing on allegations that Odey dismissed the executive committee at Odey Asset Management for “an improper purpose” and said its enforcement arm is leading the investigation.

@tommackenzietv asks Sarah Pritchard from the Financial Conduct Authority why it's "taken so long" https://t.co/qee9hKfKcm pic.twitter.com/N2jlKJK0K4

— Bloomberg UK (@BloombergUK) July 5, 2023

Odey denies the allegations. A spokesman for Odey Asset Management declined to comment. London’s Metropolitan Police didn’t immediately respond to a request for comment.

The watchdog is responding to a barrage of questions from politicians over its handling of the investigation into the hedge fund manager as well as its wider work on non-financial misconduct. It’s the first public comment by the regulator since it started looking at Odey’s conduct almost two years ago.

Odey Asset Management was plunged into turmoil last month after the Financial Times published multiple allegations of sexual harassment and assault by Odey. Numerous banks have cut ties with his firm and investors have raced for the exits, forcing the company to shut funds and suspend several others.

The regulator said that Odey Asset Management itself is also being investigated over whether it failed to have a “functional and compliant governance structure.”

Fit and Proper

A fit and proper test gives the regulator a chance to assess an individual’s “honesty, integrity and reputation; competence and capability; and financial soundness,” but the regulator has been slow to issue banning orders for non-financial misconduct without a criminal conviction. It has so far banned seven people on that basis — all but one involved a conviction or caution.

Odey was acquitted of a sexual assault allegation at a criminal trial in 2021 and the FCA said that in cases where an individual has been acquitted of criminal charges, there may be “significant challenges” using the same evidence to justify using their own powers.

“Regulatory action or an investigation of regulatory matters is not intended as a replacement for, or alternative to, a police investigation or criminal prosecution,” the FCA’s Chief Executive Nikhil Rathi said in the letter. “There may be occasions where it is appropriate for us to keep our investigation on hold while the police or another authority considers the relevant matters.”

The regulator has also been investigating allegations that Odey dismissed the executive committee at the firm that bears his name.

“We are investigating whether Mr Odey is a fit and proper person to work in financial services and whether Mr Odey has failed to comply with the FCA’s conduct rules relating to integrity and acting with due skill, care and diligence,” Rathi said in the letter.

Rathi also said that lawyers for Odey had threatened to bring a court challenge to the FCA’s probe. “We responded robustly to this,” the executive added.

--With assistance from Nishant Kumar.