DB - Morgan Stanley starts cutting ties with Crispin Odey after new allegations - reports

2023-06-08 11:53:17 ET

Morgan Stanley ( NYSE: MS ) has started ending its relationships with Crispin Odey's hedge fund firm, and JPMorgan Chase ( NYSE: JPM ) is reviewing its ties with him and Odey Asset Management, according to media reports.

Morgan Stanley has started terminating its prime broking relationship with Odey, the Financial Times said Thurdsday, citing people familiar with the matter. The moves by the two banks came after the FT published an investigation that brought new allegations of sexual harassment and assault against the hedge fund manager.

Odey denies the allegations. "This is a rehash of an old article and none of the allegations have been stood up in a courtroom or an investigation," Odey told Reuters.

He was acquitted of assault charges in British courts in 2021, but new accusations against him emerged soon after, Bloomberg said .

Morgan Stanley ( MS ) and JPMorgan ( JPM ) didn't immediately respond to requests for comment.

Through prime brokers units, banks offer a number of services to hedge fund clients, including leverage, trade executiion, and stock lending. In addition, they connect hedge funds with potential investors such as endowments, foundations, and pension funds, the FT said.

Banks are likely less tolerant of keeping clients who are facing criminal charges after their experience with Jeffrey Epstein, who was arrested in 2019 on sex trafficking charges and died in jail later that year. Executives from Deutsche Bank ( DB ), JPMorgan ( JPM ), and Apollo Global ( APO ) faced pressure from shareholders and scrutiny from authorities over their ties with Epstein.

JPMorgan CEO Jamie Dimon was questioned at a deposition in late May. Deutsche Bank ( DB ) was ordered to pay $150M to New York state for its ties with Epstein and an unrelated scandal involving Danske Bank. Apollo's ( APO ) former CEO Leon Black in 2020 was subpeonaed in the case.

Jes Staley, a former JPMorgan executive with ties to Epstein, was forced to step down as Barclays ( BCS ) CEO in 2021.

For further details see: