Title: Morgan Stanley Severs Ties with Odey Asset Management Over Sexual Assault Allegations
Morgan Stanley has announced that it will be terminating its prime brokerage relationship with Odey Asset Management in light of serious allegations of sexual assault against its founder, Crispin Odey. The decision by Morgan Stanley comes after an investigation by the Financial Times revealed how the hedge fund manager had evaded sexual assault allegations for decades. JPMorgan is also reviewing its prime brokerage relationship with Odey Asset Management over the allegations.
The Allegations Against Crispin Odey
The investigation by the Financial Times revealed that Odey had sexually harassed or assaulted 13 women over the past 25 years. Eight of the women included in the investigation claimed that they were sexually assaulted by him. The most recent alleged sexual assault occurred after a dinner at Odey’s Gloucestershire mansion, Eastbach Court, in December 2021. She invited an acquaintance to discuss a legal matter one-on-one in her living room. When the argument was over, he roughly groped her, gripping her breasts, forcing his tongue into her mouth and clamping her hand on her erect penis.
The investigation also found that Odey Asset Management’s partners had known about his alleged mistreatment of women as far back as 2004, when a receptionist resigned and launched a legal complaint against the firm. She said in her resignation letter that she was “prone to receiving unwanted and unsolicited sexual attention from Mr. Crispin Odey” in the form of “massages, kisses, hugs and crude sexually suggestive comments.” It took another 16 years for the company’s executive committee to formally investigate its founder’s behavior.
The Importance of Prime Brokers in Hedge Fund Industry
Prime brokers are essential in the hedge fund industry as they offer a range of services to their hedge fund clients, including stock lending, leverage and trade execution. They also connect hedge funds with potential investors such as pension funds, foundations and endowments. Due to this, terminating a prime brokerage relationship with a hedge fund can have serious implications for the fund, which can impact investors as well.
The Reaction of the Financial Industry
Harriett Baldwin, a Conservative MP who chairs the Treasury Select Committee, emphasized the importance of the allegations brought up by the Financial Times. “The Financial Times has published an important piece of journalism and the range of women they interviewed paints a troubling picture of an inappropriate work environment. I am sure investors and prospective investors in the funds, employees and prospective employees and the regulator will read this article with concern.”
Morgan Stanley’s decision to sever ties with Odey Asset Management has been called an ‘extremely quick reaction’ by the hedge fund manager himself. JPMorgan, following in Morgan Stanley’s footsteps, is reviewing its own prime brokerage relationship with Odey Asset Management in light of the allegations.
The Impacts on Odey Asset Management
The company’s assets under management are down from a peak of $13.3 billion several years ago. Odey stepped down as co-CEO of the company in November 2020, although he remained the majority shareholder. That month the firm established a new subsidiary, Brook Asset Management, and later rebranded nearly half of its funds to the Brook name.
The Call for Further Investigation
Jess Phillips, Labor MP and Shadow Minister for Domestic Violence and Safeguarding, called for the Financial Conduct Authority to carry out its own investigation into the allegations against Odey and to give the issue the attention it deserves.
Summary
Morgan Stanley has severed its prime brokerage relationship with Odey Asset Management amidst serious allegations of sexual assault against its founder Crispin Odey. The allegations, brought up by the Financial Times, reveal how Odey evaded sexual assault allegations for decades despite his company’s partners having known about his alleged mistreatment of women since 2004. Prime brokers are an essential part of the hedge fund industry and their termination of a relationship with a hedge fund can lead to serious implications. Odey Asset Management has seen its assets under management decline, and JPMorgan has also started reviewing its relationship with the company. Jess Phillips, Labor MP and Shadow Minister for Domestic Violence and Safeguarding, has called for further investigations into the allegations against Odey and the Financial Conduct Authority to take appropriate action.
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Morgan Stanley on Thursday moved to sever ties with Crispin Odey’s Odey Asset Management in the wake of a Investigation in the Financial Times which recounted how the hedge fund manager had evaded sexual assault allegations for decades.
The bank has begun the process of terminating its prime brokerage relationship with Odey, according to people familiar with the situation. Morgan Stanley and Odey Asset Management declined to comment.
Hate he told Reuters on Thursday that Morgan Stanley’s move was “an extremely quick reaction to an accusation from the FT”.
JPMorgan is also reviewing its prime brokerage relationship with Odey Asset
Management in light of allegations in the FT, according to two
people who know the situation. JPMorgan declined to comment.
Prime brokers offer a range of services to their hedge fund clients, including stock lending, leverage and trade execution. They also connect hedge funds with potential investors such as pension funds, foundations and endowments.
Harriett Baldwin, a Conservative MP who chairs the Treasury Select Committee, said: “The Financial Times has published an important piece of journalism and the range of women they interviewed paints a troubling picture of an inappropriate work environment.
“I am sure investors and prospective investors in the funds, employees and prospective employees and the regulator will read this article with concern.”
Morgan Stanley’s decision comes after the publication of an investigation by the FT on Thursday into allegations that Odey sexually harassed or assaulted 13 women over the past 25 years. Eight of the women included in the investigation she claimed she was sexually assaulted by him. A law firm representing Odey said the charges brought against him were “strenuously contested”.
The most recent alleged sexual assault occurred after a dinner at Odey’s Gloucestershire mansion, Eastbach Court, in December 2021. She invited an acquaintance to discuss a legal matter one-on-one in her living room. When the argument was over, he roughly groped her, gripping her breasts, forcing his tongue into her mouth and clamping her hand on her erect penis.
The investigation also found that Odey Asset Management’s partners had known about his alleged mistreatment of women as far back as 2004, when a receptionist, Jae-Ann Maher, resigned and launched a legal complaint against the firm. She said in her resignation letter that she was “prone to receiving unwanted and unsolicited sexual attention from Mr. Crispin Odey” in the form of “massages, kisses, hugs and crude sexually suggestive comments.” It took another 16 years for the company’s executive committee to formally investigate its founder’s behavior.
Jess Phillips, Labor MP and Shadow Minister for Domestic Violence and Safeguarding, called on the financial regulator, the Financial Conduct Authority, “to absolutely carry out its own investigation and give these serious sexual assault allegations the attention they deserve.” they deserve”.
The company’s assets under management are down from a peak of $13.3 billion several years ago. Odey stepped down as co-CEO of the company in November 2020, although he remained the majority shareholder.
That month the firm established a new subsidiary, Brook Asset Management, and later rebranded nearly half of its funds to the Brook name.
Additional reporting by Laura Hughes in London
https://www.ft.com/content/f5a4ccf8-07d6-42d9-b6a3-1ac82231aec8
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