The wide-ranging lessons of the Crispin Odey affair

It took only a week after the Financial Times exposed years of alleged sexual misconduct by Crispin Odey for his eponymous London hedge fund to start being dismantled. The question remains why Odey was able — according to the accounts of 13 women — to engage in serial improprieties for more than two decades without being reined in, internally or externally. Odey’s legal representative says the allegations are “strenuously disputed”. But the fact they have finally been aired is a sign, in part, of the cultural changes wrought by the #MeToo movement. The case shows the City of London remains too much of a boys’ club, but it has ramifications well beyond the Square Mile.

One is the particular difficulty of calling to account a founder or owner whose name is on the door and who has powers to hire and fire — compared with large public companies where complainants may these days have a bit more confidence that they will be heeded, and shielded. At Odey Asset Management, potential safeguards apparently failed to operate, over years. Female victims feared retribution if they spoke out. Too many employees were seemingly ready to tolerate and normalise Odey’s behaviour, as it benefited them to do so.

When an investigation finally began into the founder’s conduct, the fact it was by the fund’s in-house legal team and its longstanding external law firm undermined at least one woman’s trust that her comments would not get back to Odey. When in late 2021 the fund’s executive committee tried for a second time to take disciplinary action against Odey, he sacked them. The regulator, the Financial Conduct Authority, faces questions, too, over why it failed to act sooner, despite investigating alleged non-financial misconduct and then governance issues at Odey since early 2021.

Industry insiders note that the regulator is required to forge a link between non-financial — including sexual — misconduct and the test it administers of whether individuals are “fit and proper” to hold a senior finance role. And building legal cases strong enough to win can be challenging for regulators and law enforcement alike. Odey’s acquittal in March 2021 on an indecent assault charge against a female banker — and the judge’s critical comments about the complainant — made some women more reluctant to come forward.

Owners or bosses of businesses above a certain size ought to be required to put in place anti-sexual harassment policies and protections for whistleblowers. Questions should meanwhile be asked of those that do not. Regulators, trade bodies, investors, suppliers and customers all have a role in ensuring that those they deal with adhere to best practices.

Partner firms of Odey, including major global banks, were slow to cut links even as chatter surrounding him grew. The unravelling of his business is a cautionary tale that changing expectations mean those who fail to act or speak out over alleged wrongdoing that later comes to the surface can be tarnished by association.

Where companies ask an external law firm to probe sexual harassment complaints, it is preferable to hire a new firm that is not their usual adviser. They should consider waiving legal privilege to allow full transparency and the terms of reference to be shared with complainants. Sectoral regulators need to be given the legal tools and resources to police misbehaviour where companies do not.

With the Odey affair coming soon after a sexual misconduct scandal at the CBI, the UK employers’ group, the business world is under scrutiny as never before. Though progress is still too slow, both should be milestones on the road to ensuring all women — and anyone vulnerable to mistreatment or discrimination — can feel safe, wherever they work.