Enforcement watch: FCA to fine and ban Crispin Odey from financial services industry

By Claire Holland, Neeva Rice, Sonya Zywko

31 Mar 2025 | 3 minute read

The FCA has published its Decision Notice regarding the conduct of Crispin Odey, fund manager and majority owner of Odey Asset Management (OAM) following allegations of non-financial misconduct (although the FCA made no finding in respect of the underlying allegations of non-financial misconduct themselves). The FCA is proposing to fine Mr Odey £1.8m and prohibit him from working in financial services. The FCA has determined that Mr Odey has breached Individual Conduct Rule 1 (integrity) as a consequence of: (i) steps taken to frustrate OAM's disciplinary process in order to protect his own interests; and (ii) a disregard for OAM's governance processes causing OAM to breach regulatory requirements.

Mr Odey is appealing the Decision Notice, which has no effect pending a determination by the Upper Tribunal.

Key events include:

- In 2020 and 2021, two OAM employees alleged that Mr Odey had sexually harassed them. OAM’s Executive Committee (ExCo) carried out an internal investigation during which further allegations of sexual harassment between 2003 and 2020 and one allegation of sexual assault by Odey of a female employee in 2005 were identified.

- Following a disciplinary hearing in January 2021 Mr Odey was issued with a final written warning (the “Final Warning”) on the basis that Mr Odey’s proven conduct fell short of OAM’s policies and values but ExCo concluded that Mr Odey had not breached the FCA’s Conduct Rules and remained fit and proper in relation to OAM’s regulated activities. The Final Warning outlined a number of conditions such as ensuring interactions with staff were professional and in line with OAM’s policies and procedures (the “Conditions”).

- Further allegations in respect of Mr Odey’s conduct were received by OAM including in October 2021, which were included in the scope of OAM’s internal investigation. Around this time an FCA investigation was commenced into both OAM and Mr Odey concerning the alleged non-financial misconduct by Mr Odey (the “Allegations”) and OAM’s handling of those Allegations.

- The disciplinary hearing in January 2022 (initially scheduled in December 2021) was postponed indefinitely and ultimately for nearly a year following resolutions passed by Mr Odey in his capacity as majority shareholder on two occasions to remove existing members of ExCo and appoint himself as sole member. Other steps included exerting pressure on ExCo members to discontinue disciplinary proceedings.

- An outcome letter issued following a disciplinary hearing on 29 November 2022 concluded that Mr Odey had breached the Conditions on two occasions but that these were not substantive or inappropriate conduct which could reasonably be considered harassment.

- In February 2023, the FCA changed the scope of its investigation to focus on Mr Odey’s conduct following the issue of the Final Warning rather than the Allegations. In December 2023, the FCA closed its investigation into OAM.

Decision Notice

Findings include:

Mr Odey's actions were deliberately designed to frustrate OAM's disciplinary process into his conduct in order to protect his own interests, which was a breach of Individual Conduct Rule 1, which requires regulated individuals to act with integrity.

Mr Odey's dismissal of ExCo members on two occasions caused OAM to breach certain regulatory requirements; by appointing himself as sole ExCo member he assumed sole responsibility for key regulatory roles (including SMF27) which had previously been held by industry professionals with a range of skills and experience. This undermined OAM's governance, risk management and senior management oversight by removing checks and balances and it left Mr Odey as the sole responsible individual in charge of investment risk decisions for all funds under OAM's management, whilst he also acted as fund manager. Thus, OAM was unable to meet the threshold conditions of effective supervision, appropriate resources and suitability. The FCA determined that the removal of ExCo members posed a risk to investors and created a risk of harm to consumers.

The Decision Notice notes that the Final Warning refers to a reluctance of some members of staff to raise concerns about Mr Odey's behaviour. In the FCA's view, an organisation which appears unable to effectively deal with allegations of sexual harassment or other NFM risks cultivating a workplace where people feel unable to report concerns and have confidence they will be independently and fairly assessed, creating a risk that issues are not raised and improper conduct is not challenged. The potential consequences include broader harm to consumers and the market, according to the FCA.

Comment

The term non-financial misconduct captures a broad range of behaviour including discrimination, harassment, victimisation and bullying (or "NFM" for short). However, the definition remains subjective as seen in this Decision Notice and the FCA's NFM survey of wholesale financial services firms in October 2024 (for a summary of the survey results see our article). Survey findings included that 41% of NFM incidents fell within the "other" category which captured behaviours including inappropriate or offensive language or communication style within the firm or with third parties. Other notable findings include that the number of NFM incidents has increased over the three years surveyed with 43% of cases resulting in disciplinary or "other" outcomes.

The FCA has been consulting on proposed changes to its regulatory framework since September 2023 with a view to providing clarity on the circumstances in which NFM may amount to a breach of either the Conduct Rules or Fit and Proper requirements, which has been welcomed by firms following conflicting enforcement outcomes. It has recently announced that it is taking additional time to consider whether its proposals are proportionate and in line with planned legislation, with the intention to set out next steps by the end of June 2025. In the meantime, this Decision Notice does not provide additional insight on the circumstances in which allegations of sexual harassment could constitute a breach of the Conduct Rules, thereby presenting ongoing challenges for firms when determining the appropriate disciplinary action in the face of allegations of this nature or other types of NFM. For further commentary, see our previous article on Odey and Sonya Zywko's comments in the FT's Ignites Europe.

The Odey decision does, however, make it clear that concerns over NFM must be thoroughly investigated and emphasises the importance of maintaining good governance over decision-making. The FCA's comments to date reflect its continuing focus on improving culture in financial services firms, emphasising the importance of robust policies and procedures, particularly in relation to whistleblowing, so employees feel able to speak up. It is also apparent from the FCA survey that board-level oversight of NFM incidents should be a priority, that firms should benchmark the number and type of NFM incidents that have arisen against peers and reflect on whether processes are sufficiently robust to detect and deal with incidents of NFM as they arise.