FCA investigates Odey Asset Management

Morgan Stanley moves to sever relationship with hedge fund manager following FT investigation

Odey Asset Management faces a widening investigation by the UK’s Financial Conduct Authority and the loss of key banking relationships after 13 women made allegations of sexual assault and harassment against founder Crispin Odey.

The UK’s top financial regulator opened an investigation into potential “non-financial misconduct” at the hedge fund two years ago, according to people familiar with the probe.

The inquiry later shifted to examine corporate governance issues after Odey fired his executive committee in 2021, these people said, and it may now be widened to consider fresh allegations of sexual assault reported in a Financial Times investigation on Thursday.

The FCA said it was unable to comment on “individuals or specific firms” but added: “However, we take allegations of non-financial misconduct seriously and expect firms to have adequate governance procedures in place that ensures allegations of misconduct are properly investigated.”

News of the FCA probe came after Morgan Stanley moved to sever ties with the firm after the FT investigation. Prime brokers such as Morgan Stanley provide credit to hedge funds to facilitate their trading.

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Odey on Thursday told Reuters that Morgan Stanley’s move was “a massively quick reaction to an allegation by the FT”, adding that “none of the allegations have been stood up in a courtroom or an investigation”.

The FT investigation revealed that 13 women alleged they had been sexually harassed or assaulted by Odey over the past 25 years. A law firm representing Odey said allegations made against him were “strenuously disputed”.

The most recent alleged sexual assault took place in December 2021 after a dinner party in Odey’s Gloucestershire mansion, Eastbach Court. A female acquaintance of Odey told the FT she was invited to discuss a legal matter alone with him before he violently groped her.

The investigation also found that partners at Odey Asset Management were aware of his alleged mistreatment of women as far back as 2004 when a receptionist resigned and initiated a legal complaint against the firm.

In her resignation letter she said she was “prone to receiving unwanted and unrequested sexual attention from Mr Crispin Odey” in the form of “massages, kisses, embraces and crude sexually suggestive comments”.

The FT investigation revealed that the firm’s executive committee attempted to discipline Odey in December 2021 for breaking a “final written warning” prohibiting him from behaving inappropriately with female staff. Instead, Odey fired the committee.

JPMorgan and Goldman Sachs are reviewing their prime broking relationship with Odey Asset Management in light of allegations in the FT, according to people familiar with the situation. JPMorgan and Goldman declined to comment.

Jess Phillips, a Labour MP and shadow minister for domestic violence and safeguarding, said the FCA should “absolutely carry out their own investigation and give these serious allegations of sexual assault the attention they deserve”.

Harriett Baldwin, a Conservative MP who chairs the Treasury select committee, said: “The range of women . . . paints a troubling picture of an inappropriate work environment.” She added: “I am sure investors and prospective investors in the funds, employees and prospective employees and the regulator will read this article with concern.”

The firm’s assets under management have fallen from their peak of $13.3bn several years ago. Odey stepped down as co-chief executive in November 2020, although he remained the majority owner.

That month Odey Asset Management established a subsidiary, Brook Asset Management, and later rebranded almost half of its funds under the Brook name.

Morgan Stanley, JPMorgan and Odey Asset Management declined to comment.