Wall Street firms are poised to reassess how they vet hedge funds, industry sources and experts say, following a race to cut ties with Odey Asset Management after founder Crispin Odey was accused of sexual misconduct in the press.

The Financial Times and Tortoise Media, in a joint publication on June 8, reported allegations by 13 women that Odey – one of Britain’s best-known hedge fund managers – had sexually assaulted or harassed them over a 25-year period.

Within hours of that report being published, Wall Street firms including Goldman Sachs, JPMorgan and Morgan Stanley began reviewing prime broking ties with Odey Asset Management, which they then went on to cut.

Odey last week told Reuters that the report was a “rehash of an old article and none of the allegations have been stood up in a courtroom or an investigation.” A spokesperson for the hedge fund declined further comment on Thursday. Odey has since declined calls and messages.

OAM is now breaking up its funds and employees are moving to rivals following the allegations.

Big banks typically agree terms with hedge funds that allow them to cut ties at short notice, five sources from prime brokerages and hedge funds told Reuters.

They may decide to interpret those existing agreements differently to avoid being associated with scandal as they face greater scrutiny on their tolerance for misconduct even when it is making them money.

“Whilst the prime brokers have lagged, they are now catching up. They will likely no longer lend to managers with governance issues similar to those of Epstein or Archegos,” said Michael Oliver Weinberg at the family office, CMT Portfolio Advisers.

JPMorgan Chase agreed this week to pay about $290 million to settle a class action by victims of the late Jeffrey Epstein over the bank’s relationship with the disgraced financier.

Archegos Capital Management founder Bill Hwang allegedly hid his fund’s extreme exposure from its lenders before collapsing in 2021, raising questions about banks’ risk management policies as they faced losses of up to $10 billion.

All of the banks mentioned in this story declined to comment when asked about the vetting process between their prime brokerage services and hedge funds.

Prime brokers lend hedge funds money to make trades. They also often introduce them to new investors. Hedge funds that routinely take a short position on a stock – borrowing shares they do not own to sell them – cannot function without a prime brokerage. OAM takes long and short positions in equities.

Banks covet prime brokerage business – which generated more than $15 billion in annual revenue in recent years – as it enables firms to also offer those clients other services, such as wealth management and investment banking.

Prime brokerages may now refine due diligence processes and perform more thorough background checks on hedge funds, said Jim Neumann, chief investment officer of Sussex Partners, which advises investors on how they give their money to hedge funds.

“Whether or not the prime brokerages should have been aware of any improprieties will be discussed and investigated,” said Neumann.

According to the FT, Odey fired his executive committee in 2021 after he had been given a written warning on how to communicate with female staff. Odey was cleared of indecent assault charges by a British court earlier that year.

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Goldman Sachs, UBS, Morgan Stanley and JPMorgan have started to wind down service agreements they had with the firm, sources told Reuters. This can take up to 90 days, but the process is often shorter, one of the sources said.

Reasons to sever ties can include when a fund loses money, if it is sued, or goes bankrupt. Sometimes clauses about regulatory approval for employees or the departure of a key person from the fund can mean the end of a relationship, according to a former banker, a hedge fund manager and a prime broker who spoke on condition of anonymity.

But many of these agreements mainly focus on the financial viability of the hedge fund, two of the sources said.

One hedge fund manager said he was asked in his due diligence with the bank if he was approved by the UK regulator, the Financial Conduct Authority. That was enough to pass the checks at the time, some years ago, he said.

Moreover, these agreements typically are not reviewed or amended, the sources added.

Epstein, Archegos and now Odey may have brought a turning point for banks, said several insiders. Any chance of a bad actor and the banks will run, a second hedge fund manager said. They will use terms already baked in to contracts rather than ignore them, the prime broker that spoke to Reuters said.

In the financial services industry there appears to be “a culture of permissiveness towards predatory and abusive conduct towards women in the workplace,” said Erika Kelton, a lawyer at U.S. legal practice Phillips & Cohen, who represents whistleblowers.

“This will change when not only individuals are held accountable, but when firms too are made responsible for their failures of control and governance.”