By Nell Mackenzie and Sinead Cruise
LONDON (Reuters) -Britain’s financial watchdog confirmed its investigation into Crispin Odey and the hedge fund he founded for the first time on Wednesday, and defended its supervision of a business thrown into turmoil by allegations of sexual misconduct against Odey.
Odey, who founded Odey Asset Management (OAM) in 1991, was ousted from the hedge fund in June after the Financial Times and Tortoise Media jointly reported the allegations of sexual misconduct from 13 women. Odey has denied the allegations.
The scandal has prompted questions over the supervision of OAM by Britain’s Financial Conduct Authority (FCA).
In a letter to Parliament’s Treasury Committee, the FCA confirmed it is investigating whether Odey is a “fit and proper” person to work in financial services following allegations he breached integrity rules in dismissing the executive committee of his firm in 2021 for “an improper purpose”.
The letter did not give details of the alleged improper purpose. OAM declined to comment.
Individuals can be banned from working in Britain’s financial services industry if the FCA considers they are not “fit and proper”.
FCA Chief Executive Nikhil Rathi said in the letter that the regulator’s supervision of OAM had been “intensive” since 2020 and its investigations were opened in mid-2021.
The FCA noted Odey, 64, had not held an approved senior manager role since 2020.
The regulator said its “fit and proper” test was centred on issues such a person’s ability to do a job honestly and to protect consumers, although it also considers factors such as past criminal and civil proceedings.
However, when a person has been acquitted of criminal charges it presents “significant challenges to using the same evidence to justify the use of our formal powers,” the FCA said.
Odey was acquitted of indecently assaulting a young female banker in 1998, after a three-day London trial in 2021.
Parliament could legislate and give the FCA the authority to ban people automatically for certain offences, the letter added.
(Reporting By Sinead Cruise and Nell Mackenzie; Editing by Dhara Ranasinghe and Mark Potter)
