Crispin Odey has failed in his challenge against a FCA ban preventing him from working in UK financial services, in a ruling that leaves the former hedge fund manager facing a £1.5m fine and significant restrictions on his professional activities, according to a report by the Financial Times.
The Upper Tribunal upheld the regulator’s decision, although it reduced the penalty from £1.8m. The judgment found that Odey had acted with “reckless disregard” for corporate governance and regulatory requirements at the hedge fund he founded.
The case centred on his response to disciplinary proceedings concerning allegations of sexual harassment involving female employees, rather than the alleged misconduct itself. Judges found that he had twice dismissed the firm’s board in an effort to prevent a disciplinary hearing from taking place.
The tribunal said Odey’s actions demonstrated a lack of integrity and that he had been motivated by “self-interest and self-preservation” to avoid accountability. It also found that his conduct had the potential to reinforce a culture in which employees were reluctant to raise concerns.
The ruling follows a three-week hearing in March, during which Odey faced scrutiny over his handling of the allegations, as well as claims relating to company records, investor communications and his dealings with the regulator.
The former manager, who built his reputation through contrarian bets including against UK banks during the 2008 financial crisis, has continued to contest the sanctions imposed by the FCA.
The tribunal said it had taken account of mitigating factors, including a degree of co-operation with the regulator, when reducing the fine. However, it found that Odey’s evidence contained contradictions and that he had failed to demonstrate sufficient understanding of the seriousness of the conduct that led to the FCA’s action.
The judgment also noted that the sexual misconduct allegations remained relevant to the case, despite the tribunal’s primary focus being Odey’s conduct in relation to corporate governance.
The decision comes three years after Odey was forced out of the hedge fund that bore his name following the publication of allegations of sexual harassment and assault. He has since settled separate personal injury claims brought by five women and abandoned a libel action against the Financial Times over its reporting.
The FCA welcomed the outcome. Therese Chambers, the regulator’s joint executive director of enforcement and market oversight, said Odey had acted as though he could operate without consequences and had sought to protect himself rather than comply with the rules.
Odey has two weeks to seek permission to appeal the judgment.
