Ironically, JPMorgan was the final straw for Odey Asset Management. On Monday, the U.S. banking giant agreed to pay up to $290 million to survivors of the late billionaire Jeffrey Epstein’s sex crimes, despite issuing complaints about his actions. Multiple internal warnings, but still treat it as a profitable client. Last Tuesday, the bank cut off prime brokerage and custody arrangements that were critical to Odey’s survival.
Less than a week ago, the Financial Times published an article denouncing at least 13 women – former employees, clients or acquaintances – of allegations made against the London-based firm’s boss and founder, Crispin Odey. Deplorable reports of allegations of sexual assault, abuse and harassment.
By last Thursday, the firm appeared to have conceded its own collapse, announcing that it was in discussions to move some of its funds to other asset management groups. Four funds have been closed, suspended or closed as investors scrambled to withdraw their funds. Odey himself was forced out, despite being a majority shareholder in the company of the same name.
There are stark differences between the Epstein and Oder events. For example, there is no indication that Odey preyed on underage girls; instead, Odey’s allegations focused on his boss abusing company employees, while the charges against JPM involved his indirect connection to client abuse. But there will likely be a similar swirl of legal action — brought by Odey himself if he feels he has been unfairly expelled from his company; and allegations against him and the company by people who allegedly abused him.
Rumors and allegations against Odey have been circulating for years, as the Financial Times reported. He was even charged in a criminal trial for indecent assault in 2020, but was acquitted with “good character intact,” in the words of Judge Nicholas Rimmer.
Lawyers said multiple other potential complainants – including those who gave their experiences to the FT and anyone who may now appear – were likely to seek new criminal charges against the financier under the Protection from Harassment Act. litigation. However, they acknowledged that the historical nature of the charges (spanning from the 1990s to 2021) and the high threshold for a guilty verdict “beyond a reasonable doubt” could make successful criminal prosecution challenging.
There are several paths to a civil case, though, and to be a successful claimant it must be proven “on the balance of probabilities” within any relevant statute of limitations period. That route could run parallel to a criminal case, which would see the hedge fund and potentially senior partners prosecuted, as well as Odey himself. Some of the junior women who Odey allegedly assaulted argued that other employees of the firm, including partners, helped protect him: They made it on women to avoid such situations, rather than take action against Odey.
Although they have conducted internal investigations over the past few years, to no avail. All the while, it appears that more women working in corporations are being harmed. The moral case for holding firms and their senior partners accountable for this is strong. Legal argument, at least in theory, is even easier. Personal injury claims can be made under the Work Health and Safety Act and the common law principles of negligence. Employers may have “vicarious liability” for the actions of senior employees.
But even successful civil lawsuits can only recover limited damages, usually based on lost income from the accident. Higher damages may be awarded if the complainant can prove serious or lasting psychological harm. (Because of the three-month statute of limitations, women lose the opportunity to obtain substantial financial compensation through employment court.) In this sense, the British system is very different from the kind of punitive damages culture that exists in the United States.
While U.S. activists have complained that such a deal lets JPM escape any acknowledgment of responsibility or promises to tighten the process, the situation at Odey remains unsatisfactory.Yes, he’s been humiliated – kicked out of his eponymous hedge fund group, which may soon be liquidated and possibly stripped tens of millions of pounds in cash This seems to hold it up. But he still walks away with an estimated £600m of funds he managed, much of it the spoils of 30 years of investment, while allegedly abusing many of the people he hired along the way. This doesn’t feel like justice.
patrick.jenkins@ft.com