On March 17, the Financial Conduct Authority (FCA) announced that it has issued a £1.8 ($2.3) million fine and industry ban against Crispin Odey for a “lack of integrity.” The regulator found that Odey, hedge funder manager and founder of Odey Asset Management LLP (OAM), “deliberately sought to frustrate OAM’s disciplinary processes into his conduct to protect his own interests.”
A serious “lack of integrity”
The FCA’s Notice of Decision on the recent fine and ban stated that as early as 2003 through to 2021 Odey had been accused of sexual assault and misconduct by OAM employees. The Financial Times (FT) published a piece in June 2023 further detailing the many instances of misconduct Odey was accused of, stating that they had “corroborated accounts of an abusive workplace culture through interviews with more than 40 former employees of OAM at every level.”
In February 2021, OAM conducted initial investigations into these allegations, and despite various misconduct reports, decided that Odey was not in breach of the FCA’s Conduct rules. Instead, Odey was issued a “Final Written Warning for Misconduct,” which gave conditions to comply with to avoid removal from OAM.
OAM subsequently set up a disciplinary hearing in November 2021 to deliberate whether Odey was in breach of the Final Written Warning. Odey was able to circumvent repercussions on multiple occasions by using his majority shareholding to remove members from OAM’s Executive Committee and appoint himself instead. Resultingly, he was able to postpone his hearing, though it finally took place in November 2022.
Checks and balances
In the wake of this misconduct, Odey has been found responsible for multiple actions that violated acceptable standards of behavior, such as negligence of OAM’s governance and compliance processes, which led to regulatory breaches. In addition, his lack of “candor” toward OAM and the FCA further emphasized to the regulator that he is not “fit and proper,” leading to a complete ban from the financial services industry.
Odey’s behavior severely impacted OAM’s risk management and integrity by eradicating the checks and balances required to identify and challenge serious misconduct. In addition, a failure to commit to accountability, as well as an inability to rectify noxious workplace culture meant that employees were afraid to speak up for fear of repercussions. The FCA noted that:
“Mr Odey’s repeated threats and interventions in OAM’s disciplinary proceedings against him were likely further to entrench the view…that OAM was not effectively able to scrutinise Mr Odey’s conduct…This view was reflected in the Final Written Warning, which identified that because ‘of a desire not to “ruffle feathers” or because of concerns that nothing would be done…[some] employees would rather say nothing or even resign” instead of lodging a complaint.’”
In the FT’s coverage of the allegations against Odey, the media source found that senior executives at OAM knew of his behavior, but took 16 years to officially begin an investigation. With senior leadership perpetuating toxic workplace environments by permising wrongdoers to go by unscathed, bad behaviors continued to snowball.
As the FCA highlighted in the Notice of Decision, this lacking culture presents a market risk:
“A culture of silence in which allegations of misconduct are not dealt with effectively can put consumers and markets at risk. Mr. Odey repeatedly sought to evade and obstruct efforts to hold him to account. His lack of integrity means he deserves to be banned from the industry.”
Despite various investigations and testimonies, the FCA findings are still provisional as Odey has referred the FCA’s Decision Notice to the Upper Tribunal to appeal the decision.
The FCA’s non-financial misconduct spotlight intensifies
Conduct has been a focal point for the FCA over the past year. In a bid to increase transparency around the topic, the regulator issued a survey in February 2024 to assess incidents of non-financial misconduct (NFM) at regulated firms.
In October 2024, results of the FCA’s survey were published, with key findings showing that:
- The number of incidents of reported NFM increased significantly over three years
- The highest reported types of NFM were bullying and harassment (26%) and discrimination (23%)
- The outcomes of incidents of NFM were varied, such as cases not being investigated, not being concluded, not upheld, upheld with no further action, or remaining ongoing
While the FCA clarified that the increase in NFM could be interpreted in different ways, such as being an indication that people are more comfortable speaking up, it remains clear that misconduct remains an issue that needs to be taken seriously across organizations.
Emily Shepperd, the FCA’s chief operating officer, stated in a February 2025 speech that poor culture spreads like a “winter bug,” as symptoms of bad culture – such as tolerance of wrongdoing – can impact an entire organizations health. In particular, she said that a clear warning of lacking culture is instances of non-financial misconduct.
Commitment to conduct & culture
The FCA’s not the only one focused on conduct and culture – across the pond, U.S. regulators have paid increasing attention to these themes. From speeches on strong cultural policies from the NY Fed to advice from the Securities Exchange Commission to strengthen “tone at the top,” several watchdogs have weighed in with thoughts.
In particular, enforcement action for off-channel communications fines often cite senior leaders as some of the main culprits participating in non-compliant activity, such as in a round of fines issued by the Commodities Future Trading Commission against Wall Street banks in August 2023.
Across jurisdictions, regulators are more firmly underscoring their commitment to promoting healthy culture and proper conduct. With the FCA issuing fines and banning individuals who have been making headlines for severe misconduct, can the industry expect to see more fines for NFM to come?
