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The Financial Conduct Authority has defended its “intensive” oversight of Odey Asset Management in its first public affirmation of its investigation into the troubled hedge fund group and its founder, Crispin Odey.
The UK’s high monetary regulator had beforehand declined to make any public assertion on the affair for the reason that Financial Times revealed on June 8 allegations of widespread sexual misconduct by Crispin Odey. The FCA’s silence prompted the Treasury choose committee to ship the watchdog a written request for data on June 14.
In a response to the committee revealed on Wednesday, FCA chief govt Nikhil Rathi stated that “in the exceptional circumstances of this case, it is necessary and appropriate for me to confirm to the Committee that the FCA has ongoing investigations into both Mr Crispin Odey and Odey Asset Management LLP”.
Rathi will give proof in entrance of the committee on July 19 when extra scrutiny of the FCA’s investigation is predicted.
The investigation into Crispin Odey is targeted on “allegations that he dismissed OAM’s Executive Committee for an improper purpose”, Rathi wrote, and whether or not he’s a “fit and proper person” to work in monetary companies.
The regulator can also be whether or not he had “failed to comply” with conduct guidelines on integrity, due talent, care and diligence. Crispin Odey fired the hedge fund’s govt committee in 2021.
The FT final month reported that 13 girls alleged that they had been sexually harassed or assaulted by Crispin Odey over a interval spanning greater than 20 years. He strenuously denies the allegations. The claims prompted key banks to maneuver to sever ties with Odey Asset Management, which is now breaking itself up, and prompted companions on the agency to defenestrate its founder.
Crispin Odey has already been faraway from the FCA’s register of individuals accredited to work in monetary companies after he was ousted by the hedge fund, however he may very well be banned from future monetary companies roles if the FCA makes an adversarial discovering towards him.
Odey Asset Management declined to remark and Crispin Odey didn’t instantly reply to a request for remark.
Rathi stated the FCA had been in touch with the police in relation to the “potentially criminal” nature of the allegations, and that parliament may “legislate if it wished” in order that “certain offences should lead to an automatic prohibition from a regulated sector”.
The FCA believed that such “non-financial misconduct” may create a “sufficient risk” to justify censure, he instructed the committee. But Rathi highlighted a earlier case to the committee, the place the Upper Tribunal that hears challenges to FCA choices dominated that the regulator couldn’t ban a person primarily based purely on his conviction for little one sexual grooming, and as an alternative may solely bar him for failing to reveal the conviction to the FCA.
The FT reported final month that Crispin Odey beforehand threatened the FCA with a judicial review over its investigation into him, partially as a result of he stated it was performing outdoors of its regulatory scope.
Rathi confirmed the authorized problem on Wednesday. “We responded robustly to this. In the event, court proceedings were not commenced and we continued to investigate,” he stated.
The FCA is investigating Odey Asset Management for “possible contraventions of the FCA’s Principles for Business for failing to conduct its affairs with due skill, care and diligence, and failing to take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems and controls”.
Rathi stated the investigations have been opened within the center of 2021 and that the FCA’s supervision of Odey Asset Management had been “intensive” since 2020.
The FT reported that the FCA was contemplating expanding its investigations in mild of the sexual misconduct allegations.
“It is important to note the nature and scope of investigations can change and it is vital we do not limit them,” Rathi stated within the letter.
Simon Morris, a lawyer at CMS who will not be concerned within the case, stated: “The FCA has to prove its case, and it seems that even after two years’ investigation it hasn’t come up with the evidence to show [Crispin Odey] lacks integrity for reasons of his personal conduct.”
