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The multimillionaire financier Crispin Odey was described by the head of his hedge fund as a “sex pest” and a sociopath and blamed an incident in which he allegedly groped a female staff member’s breasts on a sedative he had taken, a tribunal has heard.
The Brexit-backing hedge fund chief’s behaviour came under the microscope on the first day of a lawsuit he has brought against the financial services regulator over his exile from the City.
The Financial Conduct Authority (FCA) fined Odey £1.8m and banned him from the financial services industry last year.
It found that he had displayed a “lack of integrity” by attempting to frustrate an investigation by his own hedge fund into allegations of sexual harassment, which he denies.
Odey had already launched a £79m libel claim against the Financial Times, which first published claims about his behaviour towards junior female staff. The fund, Odey Asset Management (OAM), shut down after the allegations.
He is also facing civil personal injury claims by five women, including one who accused him of rape, which he also denies.
Those cases are scheduled to be heard together in joint proceedings in June.
Odey began his separate legal case against the FCA on Tuesday over the disciplinary action it took in response to his alleged obstruction of an internal investigation into his behaviour launched at OAM in September 2020.
Odey is expected to tell London’s upper tribunal that the FCA had pre-judged the outcome of its investigation into him and that he was primarily seeking to save his business, rather than protect his own position.
On Tuesday, lawyers for the FCA said Odey had taken an “egregiously unethical position”, breaching City rules by wielding his power as majority shareholder to thwart investigation into his conduct in order to protect himself.
The FCA claims Odey is not a fit and proper person to run a financial services company, having shown a “reckless disregard” for compliance and had treated internal disciplinary processes with “contempt”.
Odey’s case against the watchdog has previously led to the disclosure that an internal report on his conduct uncovered at least 46 historical allegations of inappropriate conduct towards female employees.
The tribunal heard an employee of Simmons & Simmons, a law firm appointed to investigate Odey’s behaviour, told the FCA that Odey had touched female staff without their consent and that junior staff had felt “unable to stop” him because of his seniority.
In one incident described in court, Odey began giving a staff member a shoulder massage before “groping her breasts”. She screamed and he left the room. He allegedly admitted to this during internal disciplinary procedures but blamed a sedative he had taken earlier in the day.
The court heard that the incident was described as “part of a culture of prolific sexual harassment that was accepted as part of the deal of working at OAM”.
In his own opening submission to the court, Odey contested the FCA’s view of his integrity by pointing to witness statements given to the regulator by former OAM chief executive Tim Pearey, in which he praised Odey’s “brutal honesty”.
Lawyers for the FCA pointed out that Pearey went on to say that Odey had proved to be a “sex pest” and a “sociopath”.
Pearey told the FCA: “I think he’s got a real problem. I think he finds it hard to control himself.”
The financier dismissed two executive committees tasked with looking into his conduct, the court heard, issuing “increasingly erratic and aggressive” threats to shut down the firm if the process continued.
The FCA claims he called a colleague “fucking spineless” for supporting the disciplinary process and said that human resources “did not matter” because the only concern should be his ability to manage money.
He issued threats “not only in private exchanges […] but openly on his floor of the building, in the hearing of employees, many of whom had mortgages and some no doubt families to support,” according to one witness statement referred to by FCA lawyers. He also threatened legal action against the regulator, the court heard.
In his opening submission, Odey is expected to say that FCA officials had a “hostile animus” towards him, referring to emails between staff at the regulator, one of which referred to him as presiding over a “culture where it’s OK to be a perv”.
He claims the regulator pre-judged the outcome of its investigation, which began in November 2021 and concluded in December 2022.
The process was unfair, he will say, insisting the actions he took were necessary for the fund’s survival rather than geared towards self-preservation.
Odey claims he was entitled to dismiss members of the company’s executive committee who were leading the investigation against him, believing they were not able to conduct the process fairly. He will say he dismissed them in order to save the company from collapse.
His lawyers are expected to set out his case in greater detail later on Tuesday.
