Harassment and abuse continued for decades. In contrast, Crispin Odey’s disintegration is very fast.
Within hours of the Financial Times’ publication last week of an investigation into allegations of abuse and harassment by 13 women against the hedge fund giant, Morgan Stanley began cutting banking ties with Odey’s eponymous firm. . Others such as Exane, Goldman Sachs and Schroders quickly followed.
A long-time client said he “struggled to refute” the allegations against him, so why was he in such a hurry to pull back?
One explanation is that, according to Odey’s comments on Morgan Stanley’s move, it was a “massive and rapid response” to allegations that had not been proven “by court or investigation.” Another is the lightning speed with which banks and asset managers investigate numerous reports of serious harassment and assault over 25 years and find reasons to cut ties.
Another logical explanation is that, in reality, they knew who they were dealing with all along.
“Inaction until it becomes a serious reputational issue is cliché,” said Suzanne McKie, a solicitor who specializes in discrimination and sexual harassment. “Until then, what usually matters is whether the perpetrator is making too much money to intervene.”
One question is whether the “investigations” by banks and others in recent years have served their purpose. As part of its regulatory and compliance process, each investment bank must examine Odey’s relationship in light of the indecent assault allegations in 2020, from which he was cleared in 2021. Are these processes just for show, asking questions and answering questions by people who have various financial incentives to maintain the relationship?
This is an industry that pays to do search due diligence and has a regulatory duty to vet its clients. Its standards are different from those in court. Whatever checks are in place – and the answer is likely to be mostly appeals to companies for “assurance” – they appear to be incompetent, inadequate or both.
Of course, the search for proof of health isn’t limited to banking. Discrimination and harassment lawyers bemoan the fact that even corporate investigations using independent law firms are rarely done for the purpose of obtaining evidence, or setting up the expertise to engage with victims or potential victims. Even more egregious, the use of a relationship counselor could mean that the reports are legally privileged, kept confidential from the victim, and cannot be used in court or in court.
The system can also respond to problems that rise to levels that cannot be ignored. According to professional lawyers, the financial services industry uses non-disclosure agreements on an industrial scale—for serious misconduct, but also for relatively standard employment matters, and I’ve been told that, in a way, it’s a “let’s The terms of the employer’s immunity from jail time” acted fairly and reasonably. At the same time, court proceedings are disrupted, chaotic, and backlogged to such an extent that victims demand near-infinite patience, energy, and resources to file a lawsuit.
The review that would allow New York City to continue working with Odey seems likely to focus on governance rather than people.
Odey himself stepped down as co-CEO in 2020, before his firm announced over the weekend that he was leaving, while the firm created a new, rebranded subsidiary to distinguish its fund from Odey’s name.
The man may have comforted lenders around the Odey organizational structure, but it shows his disregard for the women in his firm — or, indeed, their own. Are there any ground rules or safeguards for managing clients, including their own female employees, in continuing to do business with Odey?
Regulators also have questions to answer. Non-financial misconduct is expressly part of the FCA’s remit; non-disclosure agreements cannot prohibit reporting to the regulator. Long before Odey fired the executive committee for trying to sanction him again in late 2021, FCA received a report condemning Odey and limiting his interactions with female employees. Regulators should be held accountable for what they do next.
How to examine and deal with such issues in the future must draw lessons from them. There are other Odeys in the city. My colleagues couldn’t report all of them. And, really, they shouldn’t either.
helen.thomas@ft.com
@helentbiz