Robin Crispin Odey v The Financial Conduct Authority

Integrity in financial regulation is assessed contextually and objectively. It is broader than honesty and may be absent where a person’s ethical judgment is materially defective or the person recklessly disregards a known risk. A person’s sincere belief that conduct is justified does not excuse conduct that is objectively improper or exposes a regulated firm to unreasonable risk. Deliberately using control of a firm to frustrate its disciplinary governance for personal advantage, while knowingly putting regulatory compliance at risk, may establish a lack of integrity. Actual investor loss is not required where the conduct created a material risk of loss.

Robin Crispin Odey, a fund manager and majority owner of Odey Asset Management LLP (OAM), referred to the Upper Tribunal the Financial Conduct Authority’s decision that he had acted without integrity. The Authority had imposed a prohibition order and a financial penalty under the Financial Services and Markets Act 2000.

The allegations arose from Odey’s removal of two successive OAM Executive Committees that were due to consider alleged breaches of a final written warning imposed after an earlier disciplinary process. The Tribunal considered whether the Authority’s prohibition decision was reasonably open to it, whether it had jurisdiction to impose a penalty for Odey’s conduct as a controller, and, if so, the appropriate penalty.

1. Integrity and recklessness. The Tribunal applied a fact-specific, essentially objective assessment of integrity. Dishonesty is not required: a materially defective ethical compass or reckless disregard of regulatory obligations may establish lack of integrity. Recklessness required consideration of the facts Odey knew, whether he was aware of the relevant risks, and whether taking those risks was unreasonable in the circumstances as he knew or believed them. A person need not appreciate that the conduct is morally wrong.
2. Conduct and findings. Odey removed two successive ExCos because he feared they would hold him accountable for alleged breaches of his final written warning. The Tribunal rejected his asserted justifications, including unfairness, regulatory pressure, the need to protect OAM, and the later outcome of the disciplinary hearing. It found that his actions prioritised his own interests, frustrated the disciplinary process, exposed OAM to regulatory risk and risked reinforcing a culture in which complaints about his conduct would not be properly scrutinised. His communications to OAM, investors and the Authority also lacked candour. The five allegations of lack of integrity were established.
3. Regulatory breaches and jurisdiction. Odey’s actions caused breaches of the certification requirements, SYSC 4.2.2R and FUND 3.7.2R, and put OAM’s threshold conditions at risk. The absence of actual harm did not make the breaches merely technical. Under sections 64A and 66 of the Financial Services and Markets Act 2000, COCON applied because Odey was a certification employee and his conduct related to OAM functions and activities connected with regulated activity. The statutory test did not require him to be acting in his certified capacity.
4. Sanctions. The Tribunal held that the prohibition order was reasonably imposed and dismissed that part of the reference. On the disciplinary reference, it applied the Authority’s five-step penalty framework as a starting point, found level 4 seriousness and no net adjustment at step 3, and doubled the resulting figure to achieve credible deterrence. It determined that the appropriate financial penalty was £1,529,374, replacing the Authority’s £1,835,200 penalty.

1. Financial Conduct Authority Regulatory Decisions Committee issued a Decision Notice on 3 March 2025 imposing a prohibition order and a £1,835,200 penalty.
2. Upper Tribunal (Tax and Chancery Chamber) Odey referred the decision on 5 March 2025. The Tribunal dismissed the challenge to the prohibition order and determined that the appropriate penalty was £1,529,374.