I read the Crispin Odey Notice of Decision published by the FCA on 17 March 2025. Whilst the overall actions of Mr Odey are incredulous and many will be commenting on that part of it, particularly...
I read the Crispin Odey Notice of Decision published by the FCA on 17 March 2025. Whilst the overall actions of Mr Odey are incredulous and many will be commenting on that part of it, particularly the lack of integrity, I thought that the determination of the fine was interesting so have summarised the process here. We should note that the FCA's decision has been referred to the Upper Tribunal, so this may not be the final outcome for Mr Odey.
The FCA's policy for determining financial penalties on firms and individuals is set out in the DEPP (Decision Procedure and Penalties Manual) section of the Handbook. The FCA use a five-step framework to determine a fine on individuals involved in non-market-abuse cases.
To summarise the issue, the FCA Notice found that Mr Odey's conduct demonstrated a clear lack of integrity because his actions were deliberately designed to frustrate the firm's ongoing disciplinary process into his conduct, in order to protect his own interests, and showed a reckless disregard for the firm's governance, causing it to breach certain regulatory requirements. As a result, he did not meet the fit-and-proper test in the FCA Handbook.
Step 1: Disgorgement
Did the individual derive any financial benefit from the breach? No. Step 1 is £0.
Step 2: Seriousness of the Breach
This is based on a percentage of the individual's relevant income, starting with the gross amount of all benefits received over the period of the breach. The FCA determined the period was from 24 December 2021 to 17 November 2022. As this was less than 12 months, the relevant income is that earned in the 12 months preceding the end of the breach, which the FCA determined was £2,548,957. They then apply a percentage based on seriousness between 0% and 40%. The FCA determined this was level 4 (30%) based on the impact and nature of the breach. Step 2 is therefore £2,548,957 times 30%, which is £764,687.
Step 3: Mitigating and Aggravating Factors
Here the FCA may adjust the figure. The FCA communicated their concerns after Mr Odey replaced his entire executive committee with himself and cancelled his own disciplinary hearing, only to repeat the exercise following another allegation. The FCA increased the penalty by 20%. Step 3 is therefore £764,687 times 120%, which is £917,624.
Step 4: Adjustment for Deterrence
Here the FCA consider whether the figure would be enough to deter Mr Odey or others. Considering the assets under management of the firm at the time (£2.9bn), they judged the figure too small and increased it by a multiple of 2. Step 4 is therefore £917,624 times 200%, which is £1,835,248.
Step 5: Settlement Discount
Step 5 allows a discount if a settlement is agreed. As Mr Odey and the FCA did not reach agreement, no discount was applied. Step 5 is therefore £1,835,200 (rounded down to the nearest £100).
The FCA decided to impose a financial penalty of £1,835,200 on Mr Odey for breaching Individual Conduct Rule 1 (you must act with integrity). In addition, as this was considered a serious breach, the FCA determined that he should be prohibited from performing any function related to regulated activities. We assume Mr Odey's advisers have considered grounds for appeal, and we look forward to reading the appeal notice when published.