On 17 March 2025, the Financial Conduct Authority ('FCA') published a Decision Notice against Robin Crispin Odey, the founder of Odey Asset Management LLP ('OAM'), imposing a fine of £1,835,200 and prohibiting him from performing regulated activities in the financial services industry. The FCA's decision stems from actions taken by Mr Odey between December 2021 and November 2022, which the FCA claims were intended to frustrate a disciplinary process brought against him by OAM.
Mr Odey waived his rights to make representations before the FCA’s Regulatory Decisions Committee and instead referred the Decision Notice straight to the Upper Tribunal.
Background to the findings
Between September 2020 and January 2021, OAM conducted an internal investigation following allegations of sexual harassment by two employees against Mr Odey. The investigation uncovered numerous allegations of inappropriate conduct by Mr Odey towards female staff members. Although the OAM Executive Committee ('ExCo') concluded that Mr Odey's behaviour fell short of OAM's standards, they did not find that he had breached the FCA's Conduct Rules, and he was deemed fit and proper to continue in his role at OAM. Nonetheless, on 4 February 2021 the ExCo issued Mr Odey a final written warning, compelling him to comply with specific conditions regarding his conduct. Specifically, he agreed that he would not touch staff (other than in the context of a professional handshake), take unaccompanied female members of staff to lunch unless this had been approved by HR, or exchange messages with female members of staff otherwise than in the course of business.
In September 2021, the FCA began investigating Mr Odey's alleged non-financial misconduct and OAM's handling of the allegations.
Concerns arose in October 2021 that Mr Odey might have subsequently breached the terms of the final written warning, prompting the ExCo to schedule a disciplinary hearing in respect of his conduct. Before this could take place, in December 2021 Mr Odey used his majority shareholding to remove the members of the ExCo and appointed himself as the sole member of the committee. In this position, he unilaterally postponed the disciplinary hearing into his conduct for an indefinite period.
In a letter to OAM's members dated 24 December 2021, Mr Odey claimed that he had removed the ExCo members as a result of recent FCA actions. Specifically, he wrote that "the Executive Committee of OAM LLP has been subject to undue pressure from the FCA in their deliberations on a number of matters… and in the absence of clear and reliable guidance from the FCA, they will be compelled into certain actions which would likely precipitate the winding down of the business unless I take a number of important and necessary actions… In taking these actions I am then able to launch a judicial review against the FCA which I believe is in the best interests of the Odey Group and its wider stakeholders".
New members of the ExCo were appointed in January 2022. Further allegations of non-financial misconduct emerged in March 2022, leading the newly appointed ExCo to propose that additional safeguarding measures be put in place, which Mr Odey resisted. Later that month, Mr Odey removed the newly appointed ExCo members – telling the FCA that he did so because, amongst other things, the ExCo did not know how to progress the disciplinary investigation and were too slow – appointing himself as the sole member of the ExCo until July 2022. Following the appointment of another new group of ExCo members on 4 July 2022, the disciplinary hearing reconvened. The hearing found that Mr Odey had technically breached the final written warning of 4 February 2021. However, his actions were not deemed substantive breaches of the warning, nor to be a form of harassment. As a result, the ExCo required Mr Odey to undergo further training and imposed a one-year management embargo on him, while continuing the terms of the original warning with a 12-month review period.
The FCA's case
The FCA contends that Mr Odey's actions constitute a breach of Individual Conduct Rule 1, which mandates that individuals act with integrity. It is the FCA's position that Mr Odey's dismissal of the ExCo members and his self-appointment as the sole member were deliberate attempts to obstruct the disciplinary process and prioritise his personal interests over those of OAM.
In respect of the ExCo members dismissed in December 2021, the FCA found that Mr Odey's purported reasons for doing so were not authentic. The FCA noted that (1) it was Mr Odey, not the FCA, who wanted the ExCo to prejudge the outcome of the disciplinary hearing, (2) the FCA had placed no “undue pressure” on OAM to take any particular view in respect of the disciplinary hearings to which Mr Odey was subject, neither had it given any indication that it might “compel” the ExCo into “certain actions which would likely precipitate the winding down of the business”, and (3) following Mr Odey’s self-appointment to the ExCo, neither he nor OAM issued any judicial review proceedings against the FCA. The FCA found Mr Odey's reasoning for removing the ExCo members in March 2022 equally unconvincing. The FCA observed that Mr Odey had personally appointed these members, being satisfied with their expertise and experience, and that it was Mr Odey, not the ExCo, who was delaying OAM's internal review by insisting that it should not proceed until the FCA's investigation had been completed.
The FCA further argues that these actions demonstrate a reckless disregard for OAM's governance and regulatory obligations. The ExCo was crucial to OAM's governance and was responsible for risk management and decision-making across various business areas. By removing its members, Mr Odey disrupted the firm's governance structure, eliminating necessary checks and balances. This led to breaches of regulatory requirements, including the need for management by at least two reputable individuals and the separation of risk management from operating units. Mr Odey's actions undermined the credibility and effectiveness of OAM's governance structures, and his purported willingness to override these structures significantly weakened their authority.
Comment
The FCA's decision to impose a significant financial penalty and a prohibition order on Mr Odey underscores the regulator's commitment to upholding integrity and accountability within the financial services industry, particularly where issues of non-financial misconduct are at play. Indeed, the FCA's Joint Executive Director of Enforcement and Market Oversight, Therese Chambers, said in a press release:
"A culture of silence in which allegations of misconduct are not dealt with effectively can put consumers and markets at risk. Mr Odey repeatedly sought to evade and obstruct efforts to hold him to account. His lack of integrity means he deserves to be banned from the industry".
The FCA has been vocal about its expectations around culture and conduct within financial services firms and has taken steps to strengthen the rules on cases of non-financial misconduct, with a much-anticipated policy statement on this topic expected in June 2025.
It seems likely that the FCA commenced its investigation into Mr Odey and OAM in September 2021 because of a concern that OAM's response to Mr Odey's behaviour was insufficiently robust.
However, Mr Odey's alleged "inappropriate conduct towards female members of staff" is not the focus of the FCA's disciplinary outcome. Instead, the FCA has taken action because it considers that Mr Odey frustrated his own disciplinary process in relation to the allegations of inappropriate behaviour and that, as a result, he demonstrated a lack of integrity. The FCA's approach here echoes past cases where non-financial misconduct was at the heart of the matter, but the action taken was in respect of related misconduct that more easily engaged FCA Handbook Rules, this demonstrates the difficulties the FCA has faced in bringing decisive action for non-financial misconduct. Would the FCA's case against Mr Odey focus on the underlying alleged non-financial misconduct if the regulator's current proposals on this subject were in force? Time will tell as we await the FCA's Policy Statement which we expect to cement important changes to Handbook Rules and Guidance around these important issues.