The FCA’s recently published warning notice statement in the Crispin Odey case may be a somewhat unusual example of a governance-related investigation but it highlights the importance for firms of:

• having a clearly defined process for investigating and reaching decisions on conduct concerns;
• following the process consistently for all staff including senior managers and Board directors;
• avoiding any perception of inappropriate interference in the investigation and decision-making process; and
• ensuring those responsible for the governance around investigations and disciplinary processes understand the process they should follow and have support in achieving the right outcomes. 

The FCA’s statement tells us that, on 18 September 2024, the FCA gave Crispin Odey a warning notice proposing to take action in respect of Mr Odey’s conduct during a period of around 11 months between 2021 and 2022 which the FCA considers to have lacked integrity (in breach of Individual Conduct Rule 1).  During this period, Mr Odey was either a certified person or the holder of a senior management function (and it does not appear that the FCA is making a distinction between these roles in considering his conduct) at Odey Asset Management LLP (OAM).  

It has previously been reported in the press that allegations of sexual misconduct were made against Mr Odey by junior female members of staff.  The FCA’s proposed action does not directly concern such conduct but rather concerns steps taken by Mr Odey in connection with a disciplinary process conducted by OAM regarding “inappropriate behaviour”.  In early 2021, Mr Odey was given a final written warning about his behaviour by OAM and later that year he was due to attend a disciplinary hearing to consider whether he had breached the warning.  However, prior to the hearing Mr Odey:

• used his shareholding to remove OAM’s Exco members and to appoint himself as the sole member; 
• postponed the disciplinary hearing on the basis that he would not be able to conduct it impartially;
• appointed new Exco members and resigned;
• used his shareholding again to remove the new Exco members and reappoint himself; and 
• appointed fresh Exco members and resigned again.

The FCA considers that Mr Odey was seeking to frustrate the disciplinary process and promote his own interest; showed a reckless disregard for OAM’s governance; and caused OAM to breach regulatory requirements.  

At this stage, there is no indication of any sanction that the FCA proposes to impose.

This case still has some way to go. The next step will be for Mr Odey to make representations regarding the FCA’s proposed course of action, prior to the FCA reaching a decision (which Mr Odey could refer to the Upper Tribunal).  In the meantime, the statement may prompt firms to revisit their processes around dealing with misconduct whilst they await the FCA’s Policy Statement on “Tackling Non-Financial Misconduct in the Financial Sector” which is expected around year end.  

For more information see our webinar and our summary of the FCA’s misconduct survey.