Financial services companies taking a “slapdash” approach to ethics will be punished under new rules designed to stop the type of “horrific” behaviour that led to hedge fund boss Crispin Odey being fined and banned, the financial watchdog has warned. Therese Chambers, co-head of enforcement at the Financial Conduct Authority, told the FT its stricter rules against harassment and other bad behaviour that came into force this month would ensure “people can speak up” and be protected against misconduct. Her comments came hours after Odey lost his legal challenge against a lifetime ban and fine imposed by the FCA for frustrating attempts to discipline him over his alleged sexual harassment of female employees of his now-defunct hedge fund.

Chambers said the regulator did not have enough data to know if Odey’s case was symptomatic of “a genuinely widespread problem” of sexual harassment in the City of London. But she added: “We’ve all heard of specific incidents like this, which are pretty horrific.” Since it banned and fined Odey last year, the FCA has given itself more power to tackle such behaviour by expanding its rules on non-financial misconduct beyond banks to the 37,000 other financial services groups it regulates from the start of this month. “It’s the firms that are perhaps a bit more slapdash about the way they operate where there may well be gaps in the way that they treat their staff and the way in which they report and oversee incidents in the workplace,” said Chambers. “Those are the firms that need to be very mindful of these new requirements.” During the court hearing, Odey was confronted with more than 46 sexual harassment allegations by former staff of the hedge fund he founded, as well as accusations of falsifying company minutes, misleading investors, bullying colleagues, trying to silence victims and threatening the regulator. Chambers said the tribunal’s decision was “very gratifying” and she hoped it would encourage more victims of harassment and bullying in the workplace to speak up. “This is very much an instance of the system being there to protect people who are being mistreated who might otherwise feel that they can only operate in a culture of silence where they’re not able to call bad behaviour out,” she said.

London’s Upper Tribunal on Monday published scathing findings against Odey, concluding that he had “a warped set of values”. But it said the case had not hinged on whether or not there had been “sexualised misconduct in the workplace”. Instead, the judges upheld the FCA’s findings that Odey “lacked integrity” and acted with “reckless disregard” for his company’s corporate governance and breached the regulator’s rules by twice firing executives who were trying to investigate his alleged misconduct.

Chambers said a vital lesson for the City of London from the Odey case was that “ethical behaviour is of absolutely paramount importance when you’re managing other people’s money” and “there are consequences for them if they choose not to do that”. Although the FCA was “not in the business of pursuing technical breaches of rules through enforcement cases”, Chambers said “if we see something that is serious we will act” to enforce the new rules on non-financial misconduct. Odey, who did not respond to a request for comment, has two weeks to appeal against the judgment.