MPs will grill top executives from the UK financial watchdog next month over the regulator’s handling of misconduct allegations against the hedge fund manager Crispin Odey.
The move comes after the Financial Times revealed that 13 women alleged they had been sexually harassed or assaulted by Odey over the past 25 years. The revelations have prompted the Financial Conduct Authority to broaden an existing investigation into the firm.
FCA leadership is due to appear before the Treasury select committee of MPs by the end of July as part of the committee’s normal work on holding the regulator accountable for its decisions and performance, according to a committee insider. The parliamentary body’s mission is to scrutinise the UK’s fiscal and monetary policy and financial regulation.
“I think that as a minimum the FCA needs to be transparent and open about what they did,” Angela Eagle, a Labour member of the committee, told the FT.
“It seems that the current ‘protections’ against abuse for women in the financial services sector are totally inadequate. I will certainly wish to question the FCA about this when they appear before us.”
In early 2021, Odey Asset Management gave the FCA an internal report that concluded the financier had at times behaved inappropriately with female staff, an FT investigation revealed. The report indicated that Odey had been given a formal written warning by its firm’s executive committee and told to no longer communicate with female staff about non-work matters, nor invite female staff to lunch or engage in unwanted touching.
The UK financial watchdog subsequently opened an investigation into potential “non-financial misconduct” at Odey Asset Management, according to people familiar with the probe. The inquiry later shifted to examine corporate governance issues after Odey fired his executive committee in 2021, they added.
A law firm representing Odey said allegations made in the FT against Crispin Odey were “strenuously disputed”.
The FCA can impose a blanket ban on any involvement in regulated financial services activity if someone is deemed not “fit and proper” to work in the industry. The first test of fitness and probity is “honesty, integrity and reputation”. The regulator has previously stated that “non-financial misconduct is misconduct, plain and simple”.
Harriet Baldwin, the Conservative chair of the committee, told the FT: “While the FCA is often reluctant to discuss individual cases in public, the topic of sexual harassment in regulated firms or by people they regulate is in scope of the wide range of topics that we cover in our accountability sessions with the FCA.”
A person familiar with the committee’s workings said it was “likely” the Odey case would feature when the regulator appeared before MPs next month. The committee which meets on Tuesday for the first time since the fresh allegations were published, has not yet written to the FCA on the topic.
Financial services firms have an obligation to keep the regulator informed of disciplinary action taken against senior staff. The FCA has the power to investigate sexual misconduct claims itself and is not reliant on internal reports conducted by firms.
The FCA said it could not comment on individual investigations but that it took “allegations of non-financial misconduct seriously and expect(s) firms to have adequate governance procedures in place that ensures allegations of misconduct are properly investigated”.
A person familiar with the regulator’s position said that complex investigations took time and involved thousands of documents and interviews.
The task would be further complicated in case of parallel criminal proceedings, a second person familiar with the FCA’s processes said. In 2021 Odey was charged and later acquitted, of the indecent assault of a female junior bank employee.
The FCA has issued bans for non financial misconduct before. In 2021, it banned financial adviser Jon Frensham after he was convicted of attempting to meet a child whom he had sexually groomed.
The FCA said Frensham had lacked integrity and omitted telling the regulator about his arrest and subsequent jail time.