The latest update from the FCA;
Crispin Odey’s ban from the financial services industry has been upheld by the Upper Tribunal, which found he lacked integrity.
Mr Odey was the founder and majority owner of Odey Asset Management (OAM). He faced an internal disciplinary process for breaching a final written warning relating to repeated and persistent inappropriate behaviour towards female employees.
In response, Mr Odey bullied and threatened his executive directors. He then twice dismissed OAM’s executive committee (ExCo) when they did not give in to his improper pressure. Mr Odey was only willing to answer to a governing body that would make a decision he agreed with, which was not to sack him. By removing them, he brought the internal disciplinary process to a halt.
Mr Odey’s only purpose was self-preservation and to avoid being held to account for his behaviour. He abused his power and disregarded the impact that his actions had on the firm and its employees – in particular women who had to work in a culture where his inappropriate behaviour had been normalised – in sending a clear message that he was effectively untouchable.
The Tribunal considered Mr Odey’s attempted justifications for removing the ExCos to be no more than a smokescreen. He thought he should have free rein to conduct himself with female staff according to his own impaired judgment as to what was appropriate.
The FCA’s case against Mr Odey comprised of five allegations. The Tribunal fully upheld them all and agreed that each demonstrated his lack of integrity. Alongside the allegations arising directly from his dismissal of the ExCo’s, the Tribunal upheld the allegations that Mr Odey’s dealings with OAM, its clients, its investors and the FCA lacked candour. This included false assertions to and threatening behaviour towards the FCA’s staff.
The Tribunal found that during the trial, Mr Odey demonstrated a lack of insight into why his conduct lacked integrity, expressing no contrition for his behaviour and wrongly considering himself the victim. In multiple respects, the Tribunal found that Mr Odey’s evidence lacked credibility.
Therese Chambers, executive director of enforcement and market oversight at the FCA said:
“Mr Odey clearly thought he could act with impunity. He twice sacked those tasked with protecting female employees from his inappropriate behaviour when they tried to hold him to account. He felt the rules shouldn’t apply to him and acted to save his own skin.
“During the hearing he reinvented history, painted himself as a victim and displayed no contrition. That arrogant entitlement and the resulting complete disregard for proper governance means Mr Odey is unfit to work in financial services.”
The FCA had proposed to fine Mr Odey £1.83 million alongside the ban. The Tribunal decided to reduce this to £1.53m.
COMMENT BY CORKER BINNING
Commenting on the Upper Tribunal’s decision to uphold the Crispin Odey ban, Claire Cross, partner at Corker Binning and a former senior lawyer in the FCA’s Enforcement Division, says:
Re the judgment:
“This judgment could not have come at a more significant time – just two weeks after the FCA’s new non-financial misconduct rules came into force. Although the FCA’s case against Mr Odey concerned his conduct in relation to the governance and disciplinary processes at Odey Asset Management and the FCA’s assessment of his integrity and fitness and propriety, nevertheless, the Tribunal’s findings raise many of the very issues that the new non-financial misconduct framework is designed to address: the treatment of allegations of sexual misconduct, the obstruction of internal disciplinary processes, failures of governance, the protection of individuals who raise concerns, and the responsibility of senior people to foster a culture in which all types of misconduct are taken seriously.
“The judgment is therefore a powerful reminder that non-financial misconduct is not somehow separate from financial regulation. It sends a clear message to firms and senior managers that culture, conduct and the handling of misconduct allegations are all matters of regulatory significance.”
Re the penalty reduction:
“The reduction in the penalty is telling. This is the fifth time this year where an FCA penalty calculation has been lowered by the Tribunal. Here, the FCA was effectively trying to have its cake and eat it: it had already accounted for the seriousness of the conduct in pegging the misconduct at a level 4. However, it then sought a further 20% uplift for aggravating factors. The Tribunal rightly saw that for what it was, double counting.
“It seems remarkable that the FCA has had to be reminded that however serious the misconduct, the same factor cannot simply be built into a penalty twice.”
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