The board of Odey Wealth Management is currently exploring various options for the future of the business in light of the recent sexual misconduct allegations against its founder, Crispin Odey. While much attention has been focused on Odey’s hedge fund, the fallout from these allegations has had a significant impact on Odey Wealth. In a letter to its customers, the board of Odey Wealth stated that they are considering several options for the wealth business, although they did not provide specific details.
In response to the situation, the UK’s Financial Conduct Authority (FCA) has imposed restrictions on both Odey Wealth Management and Odey Asset Management. These restrictions include the requirement to submit details of their bank accounts to the regulator on a weekly basis and to obtain regulatory approval for any payments above £20,000. Additionally, it was revealed that Crispin Odey’s approval to work in financial services ended on June 12.
The FCA’s actions are aimed at stabilizing the business in the wake of the backlash against Odey, even after his departure from Odey Asset Management. Odey’s ousting resulted in many of Odey Wealth’s service providers considering withdrawing their services, with several prime brokers serving notice. The loss of prime brokers is significant as hedge funds rely heavily on their services, which include lending and derivative products.
The boards of Odey European Inc and Odey MAC, two flagship funds previously managed by Crispin Odey, are currently monitoring the level of redemptions they receive. Five Odey funds are now suspended, with one being liquidated and two suspended due to the weight of redemptions. Odey Wealth reassured clients that they have sufficient capital and that client assets are held by a third-party company, Pershing.
These developments follow Odey Asset Management’s announcement last week that they were in advanced discussions regarding the transfer of certain funds and staff to competitors. Odey Asset Management has been trying to contain the fallout after allegations of sexual assault or harassment from 13 women against Crispin Odey were reported. Odey vehemently denies these allegations.
In the past week, major banking partners, including JPMorgan, Goldman Sachs, and Morgan Stanley, have severed ties with the group. This has had a significant impact as JPMorgan acted as both broker and custodian to the firm. Odey Asset Management also announced the closure of the Odey Swan fund and the suspension of trading in four other funds.
Odey was removed as a partner of Odey Asset Management and his holding company, Odey Asset Management Group Limited, was also removed as a member. Odey Wealth Management declined to comment on the situation.
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