Financial Conduct Authority Details Decline in Whistleblower Tips
A report earlier this month by the Financial Conduct Authority detailed the declining number of whistleblower tips reported to the British authorities. From 2014-15 to 2016-17, the number of reports has declined each year, resulting in just 900 cases in the last year. In 2014-15, the FCA had 1,340 whistleblower reports.
A spokesman for the FCA indicated that they believe that whistleblowers are more aware of internal reporting mechanisms and are taking advantage of them. However, this system has received negative press this year due to the efforts of Barclays chief executive Jes Staley to learn the identity of an anonymous whistleblower.
The British regulators adopted measures in 2014 to require each firm to appoint a “whistleblower champion” and prohibited retaliation against employees that skip the internal reporting mechanisms in favor of reporting directly to the FCA. However, it rejected financial incentives for whistleblowers after studying the SEC program.
In May, the UK confirmed that overseas lenders that have a British Branch must inform their UK-based staff that they can whistleblow in confidence to the FCA or the Bank of England’s Prudential Regulation Authority. It extended the program to non-executive directors at lenders and insurers, while planning to roll out the regime to the entire financial-services industry. The FCA again failed to institute rewards despites suggestions to do so during the comment period.
The FCA has made various efforts to better respond to whistleblowing over the past few years. It held an internal whistleblowing event in May 2016, has networked with other bodies to benchmark their own performance, and increased training for staff on how to handle whistleblowing.
Not True For U.S.
The declining numbers stand in stark contrast to the success of the SEC and CFTC whistleblower programs, which have seen increasing numbers of tips about misconduct. The SEC and CFTC Directors recently touted the success of those programs. The SEC program, for example, has helped recover more than $1 billion since the passage of the Dodd-Frank Act by Congress.