The Financial Conduct Authority (FCA), and its powers to investigate such improper behaviour, has been in the spotlight since the Financial Times published allegations of widespread sexual misconduct by high-profile hedge fund manager Crispin Odey. Odey denies the allegations.

Nikhil Rathi, the CEO of the watchdog, told a committee of lawmakers on Wednesday that the agency would investigate non-financial misconduct cases on the basis that they were relevant to "fit and proper" standards of behaviour necessary for work in financial services.

Although case law was mixed in an evolving, sensitive area, he said: "I would not want this committee to have any doubt about our resolve to be proactive in taking on these types of complicated cases."

He also said that the FCA and Bank of England would be "clarifying guidance" on diversity inclusion in September, which could help spell out what constitutes "non‑financial misconduct".

Rathi and Ashley Alder, the FCA's chair, were quizzed by the Treasury Committee after the watchdog disclosed a two-year investigation into Odey and his hedge fund Odey Asset Management (OAM) following the allegations published by the Financial Times.

The Financial Times has reported allegations by 19 women that Odey sexually harassed, sexually assaulted or inappropriately touched them between 1985 to 2021.

Odey, who has since left the firm he founded, told Reuters in June that none of the allegations had been stood up in a courtroom or an investigation. He was acquitted of indecent assault in 2021.

Odey did not immediately respond to a Reuters request for comment on Wednesday. OAM declined to comment.

Rathi told lawmakers that, as a financial regulator, non-financial misconduct cases have to hinge on whether they affect consumer protection, market integrity and effective competition.

To date, the agency has banned seven individuals from financial services for such misconduct, typically when there has been a criminal conviction or another agency has taken action.

But Rathi also encouraged people bringing serious allegations of non-financial misconduct to go to the police or speak to the FCA through its whistleblower hotline.

In a July 3 response to Treasury Committee questions about the scope and intensity of its investigation into Odey and OAM, the FCA has said it has been in contact with the police.

London's Metropolitan Police said the FCA contacted its Complex Investigation Team in late June, that it was assessing information and that further enquiries were taking place to establish whether there was evidence of a criminal offence.

"There is no investigation at this time," a police spokesperson said by email.