FCA restricts movement of assets by O’Day’s hedge fund

The UK’s Financial Conduct Authority has restricted the movement of cash and assets from O’Day Asset Management in a bid to restore order to hedge funds after its founder Crispin O’Day was ousted over allegations of sexual impropriety.

The FCA will publish details of the voluntary restrictions agreed with Oday Asset Management on Monday, two people familiar with the situation told the FT.

The restrictions, which have also been agreed by an affiliated firm, Ode Wealth Management, will be needed to preserve both cash and assets in order to run their businesses normally.

One of the people said that in addition to the normal course of business, the FCA will require prior approval for transactions above a certain level.

FCA declined to comment, as did ODE Asset Management and ODE Wealth Management.

A person familiar with the regulator’s protocol said it was normal to impose restrictions on firms going through “difficulties” to ensure they could continue to run their businesses in an orderly manner.

The move follows 10 days of turmoil for businesses founded by Crispin O’Day, who were accused of sexual assault or harassment by 13 women in an investigation published by the FT.

O’Day’s law firm has said that it “vehemently denies” the allegations.

Oday Asset Management, which includes a hedge fund that had $4.4 billion under management before the allegations emerged, told investors last week that it was in talks to divest some of its funds, people and infrastructure .

The firm’s other partners had ousted O’Day a few days earlier, but that was not enough to stem the tide.

So far, four of Oday Asset Management’s funds have been suspended, the most recent on Friday after a “sizable level” of withdrawal requests.

The FCA has come under pressure after it emerged that the regulator had been investigating ODE for more than two years. The House of Commons Treasury Select Committee has written to the FCA to explain how it handled the matter.