Odey’s collapse is only partial justice

There is an irony in JPMorgan Chase having proved the last straw for Odey Asset Management. Last Monday, the US banking giant agreed to pay up to $290mn to the sex crime survivors of the late Jeffrey Epstein, the billionaire who JPM kept on as a lucrative client despite multiple internal warnings about his behaviour. Last Tuesday, the bank severed a prime brokerage and custody arrangement that was vital to Odey’s survival.

That move came less than a week after the Financial Times published a damning account of sexual assault, abuse and harassment accusations levelled by at least 13 women — former staff, clients or acquaintances — against the London firm’s boss and founder, Crispin Odey.

By last Thursday, the firm seemed to acknowledge its own demise, announcing it was discussing the transfer of a number of its funds to other asset management groups. Four funds have already been closed, suspended or gated, as investors rushed to withdraw their funds. And Odey himself had been forced out, despite being the dominant shareholder of his eponymous firm.

There are clear differences between the Epstein and Odey affairs. There is no suggestion, for example, that Odey preyed on underage girls; conversely, the Odey accusations relate primarily to the boss’s abuse of staff of the firm, whereas those against JPM related to its second-hand connection to abuse by a client. But there may well be a similar swirl of legal action — both by Odey himself, if he feels he was unjustly ousted from his own firm; and against him and the firm by those he is alleged to have abused.

As the FT reported, rumours and allegations against Odey had swirled for years. In 2020, he had even been accused in a criminal trial of indecent assault, though was acquitted with his “good character intact”, in the words of Judge Nicholas Rimmer.

Lawyers say multiple other potential complainants — including those who provided accounts of their experiences to the FT and any who may now emerge — could well bring a fresh criminal complaint against the financier under the Protection from Harassment Act. They admit, however, that the historic nature of the allegations, which range from the 1990s to 2021, and the high bar for a guilty verdict, “beyond reasonable doubt”, could make a successful criminal prosecution challenging.

There are several avenues for a civil case, though, and to be successful claimants must prove it only “on the balance of probabilities” within any relevant limitation period. This route, which could be pursued in parallel to a criminal case, would allow for the hedge fund and potentially senior partners to be sued, as well as Odey himself. Some of the junior women whom Odey allegedly assaulted have argued that other staff at the firm, including partners, helped to shield him: they put the onus on the women to avoid situations, rather than take action against Odey.

Although they conducted an internal investigation over the past couple of years, it was ineffectual. All the while it appears more women working at the firm have been put in harm’s way. The moral case for holding the firm and its senior partners accountable for this is strong. The legal argument, in theory at least, is even easier. Under the Health and Safety at Work Act and common law principles of negligence, a personal injury claim can be brought. The employer potentially bears “vicarious liability” for senior employees’ actions.

But even a successful civil lawsuit would elicit only limited compensation, normally based on earnings lost due to an incident. Where a complainant can prove severe or lasting psychological damage, higher damages might be achievable. (The women have lost their chance for substantial financial redress through a employment tribunal, because of a three-month limitation period.) In this sense the UK system is very different from the kind of punitive damages culture that exists in the US.

Although US campaigners complain that such a deal has allowed JPM to escape any admission of responsibility or promise to tighten processes, the Odey situation feels less satisfactory still. Yes, he has been humiliated — pushed out of his eponymous hedge fund group that may soon be wound up and probably deprived of the tens of millions of pounds of cash that appear to underpin it. But he is still walking away with an estimated £600mn of his own managed money, much of it the spoils from three decades of investing while allegedly abusing many of those he employed along the way. That does not feel like justice.

patrick.jenkins@ft.com