When it comes to harassment, the City must stop protecting its wallet

The harassment and abusive behaviour played out over decades. In contrast, the unravelling of Crispin Odey has been remarkably rapid. 

Within hours of the publication of a Financial Times investigation last week into abuse and harassment allegations by 13 women against the hedge fund titan, Morgan Stanley had started severing its banking relationship with Odey’s eponymous firm. Others, such as Exane, Goldman Sachs and Schroders, swiftly followed. 

What explains this hasty retreat from a longstanding client, who has said he “strenuously disputed” the allegations made against him? 

One explanation is that, as per Odey’s comments about the Morgan Stanley move, this was a “massively quick reaction” to allegations unproven in a “courtroom or an investigation”. Another is that banks and asset managers had, at lightning speed, investigated the many reports of serious harassment and assault over 25 years and found cause to cut ties.

One other logical explanation is that, actually, they knew who they were dealing with all along. 

“It is the same old tale of not taking action until it becomes a serious reputational issue,” says Suzanne McKie, a solicitor-barrister who specialises in discrimination and sexual harassment. “Before that point what often matters is whether the perpetrator concerned is making too much money to intervene.”

One question is whether the “investigations” by banks and other institutions in recent years were fit for purpose. Every investment bank, as part of its regulatory and compliance procedures, must have looked at the Odey relationship in the light of 2020 charges of indecent assault, of which he was cleared in 2021. Were those processes just for show, with questions asked and answered by people who had every financial incentive to maintain the relationship? 

This is an industry that is paid to carry out searching due diligence and that is under regulatory duties to vet its clients. Its standards aren’t the same as in a court of law. Whatever checks were done — and the answer may largely have been calling the company for “reassurances” — they seem to have been inept, inadequate or both.

Investigations that go looking for a clean bill of health aren’t, of course, limited to banking. Discrimination and harassment lawyers bemoan the fact that even company inquiries using independent law firms are rarely intended to be forensic, or set up with specialist skills to engage with victims or potential victims. More egregiously, the use of a relationship adviser can mean reports are legally privileged, kept private from victims and not usable in a court or tribunal.

The system also works against issues rising to a level where they can’t be ignored. The financial services sector, according to specialist lawyers, uses non-disclosure agreements on an industrial scale — for serious wrongdoing but also for relatively standard employment matters, in a way that one told me acts as a “get out of jail clause for employers to act fairly and reasonably.” Meanwhile, the tribunal process is broken, gummed up and backlogged to such an extent that victims need near-limitless patience, energy and resources to bring a case. 

It seems very possible that the reviews that allowed the City to continue working with Odey were preoccupied with governance rather than people.

Before his firm announced over the weekend that he would be leaving, Odey himself had already stepped down as co-chief executive in 2020, while the company created a new rebranded subsidiary to put distance between its funds and the Odey name.

Structuring around Odey the man may have given lenders comfort but it shows disregard for the women in his firm — or indeed their own. Did continuing to do business with Odey come with ground rules or safeguards for managing the account, including their own female staff? 

The regulator, too, has questions to answer. Non-financial misconduct is explicitly part of the Financial Conduct Authority’s remit; non-disclosure agreements can’t prohibit reports to the regulator. Well before Odey sacked an executive committee for trying to sanction him again in late 2021, the FCA had received a report reprimanding Odey and limiting his interactions with female staff. The regulator should be held to account on what it did next.

There must be lessons here for how such issues are examined and acted upon in future. There are other Odeys in the City. My colleagues can’t report on all of them. And nor, really, should they have to. 

helen.thomas@ft.com
@helentbiz