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Sexual Harassment Scandal Forces London Hedge Fund to Decentralize as Top Wall Street Firms Sever Ties

London-based hedge fund Odey Asset Management finds itself in turmoil, faced with the prospect of disbanding as a consequence of sexual harassment accusations levelled against its founder. This development follows the distancing of major Wall Street players, JPMorgan and Morgan Stanley, from the troubled fund.

In a note addressed to investors on Thursday, the asset management firm announced its intentions to disperse its assets and select employees across different investment entities, admitting that its operations have been disrupted by “recent events”.

The epicentre of these controversies, the company’s founder Crispin Odey, has been called out by 13 women for sexual harassment or assault. The allegations were brought to light through an investigation published by the Financial Times last week.

Reached for comment, Odey dismissed the claims as “rubbish”, while a law firm speaking on his behalf said he strongly contested the accusations put forth by the 13 women.

Following these revelations, investment giants such as JPMorgan, Morgan Stanley, and UBS, have severed their professional relationships with the hedge fund. The firm’s executive committee announced on June 10 that Odey would no longer have an association with the company he set up in 1991.

Furthermore, the Financial Conduct Authority, the UK’s overseer of the financial services sector, is believed to be gearing up for an investigation into Odey’s conduct in light of the Financial Times’ exposé, as reported by various sources.

Odey has been recognized for his bearish outlook on the global economy, most notably for his numerous high-stake bets against the British pound. Despite his vocal support for Brexit, Odey made significant gains by shorting sterling ahead of the UK’s departure from the European Union.

His successful financial manoeuvres extend to last year’s UK market downturn, where he profitably bet against government bonds (gilts) at a time when then-prime minister Liz Truss’s proposed tax cuts loomed as a potential economic disaster.