Odey government ‘felt physically threatened’ by former financier, courtroom instructed | USAEMALL.com

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An executive at Crispin Odey’s hedge fund “felt physically threatened” by the financier after recommending he work from home or take a sabbatical to safeguard female staff after sexual misconduct allegations against him, according to a court filing.

The UK financial regulator will present the executive’s comments about Odey’s “aggressive” behaviour as it defends its decision last year to fine the hedge fund founder £1.8mn and ban him from the industry.

Odey is challenging these penalties in a hearing in London’s Upper Tribunal, which will begin hearing arguments on Tuesday.

The financier, who is due to appear as a witness later in the trial, twice fired executive committees of his hedge fund, preventing them from holding a disciplinary hearing into sexual harassment allegations that threatened to lead to him being ousted from his firm.

The Financial Conduct Authority found this was a breach of its rules and showed Odey was “reckless” and “lacked integrity”.

Before Odey fired the second executive committee, he threatened to shut down the company, remove the managers’ directors and officers’ insurance and sue them personally, according to the FCA’s opening arguments.

Oliver Kelton, one of the committee members, told the FCA that Odey’s behaviour was on one occasion physically threatening and “clearly had the hallmarks of bullying. I have . . . never seen behaviour like this in the course of my professional life, or indeed my personal life.”

The FCA said in its written arguments: “Odey’s conduct lacked integrity because it risked reinforcing a culture in which his inappropriate behaviour towards female colleagues had been normalised, and where at least some members of staff believed allegations of misconduct against Mr Odey would not be properly scrutinised or challenged, or that such behaviour was tolerated.”

Odey’s tribunal case comes after the shuttering of the hedge fund he founded, Odey Asset Management, in the wake of sexual misconduct allegations by a number of women, which were reported by the FT and other media.

His lawyers will tell the tribunal he was acting in the interests of his hedge fund and its investors, convinced that his executives were facing such “hostile animus” from the FCA that he had to fire them to avoid being ousted, a move he believed would lead to the company collapsing.

“Through a co-ordinated strategy of covert and overt pressure being applied by the supervision, enforcement and authorisation divisions, the authority sought to secure the outcome whereby the firm would eject Mr Odey,” his lawyers said in their written arguments.

When Odey withdrew his application to be authorised as a senior manager, one of the FCA’s authorisation officials sent an email to her boss saying: “Odey withdrew (smiley face emoji)” and her manager replied “super”.

Odey’s lawyers said these emails, including an allegation by the FCA official that the hedge fund founder implemented “a culture where it’s OK to be a perv”, were “not indicative of a fair-minded and impartial regulator”.

They also said that because he was acting as controller of the hedge fund and not as a certified employee when he fired the executives, the FCA could not fine him for breach of its conduct rules.

Odey’s lawyers compared his status to that of an employee who goes shoplifting during office hours, saying this would not be a breach of conduct rules “because the act of shoplifting is wholly outside the scope of their employment”.

The FCA has rejected this, saying in its submissions that it had fined the financier for conduct “related directly to functions carried on in connection with OAM’s regulated activities”.

Odey separately faces a trial in June that will combine personal injury claims brought by five women against him and a libel case he brought against the FT over its reporting of 19 women’s sexual misconduct allegations. Odey strenuously denies both sets of allegations.