U.K. Whistle-Blowing Jumps as Traders ‘Cover Their Backs’Liam Vaughan
The U.K. Financial Conduct Authority’s efforts to encourage more whistle-blowers are bearing fruit as more alerts are filed, according to a new report.
The regulator opened 1,367 cases following approaches by whistle-blowers in 2014. That’s 44 percent more than in 2013 and a 142 percent increase since 2012, according to data compiled by law firm Pinsent Masons LLP.
“In the past people often turned a blind eye to wrongdoing for fear of rocking the boat but this is increasingly no longer the case,” Michael Ruck, a senior financial services enforcement lawyer at Pinsent Mason, said in the report. The FCA is “creating a culture where people will ‘cover their backs.’”
The rise comes after a push by the British authorities to encourage employees to report bad practices. In 2013, the FCA introduced a new case management system to make sure tip-offs don’t slip through the cracks. The same year, it held its first “Whistle-blower Forum” to motivate employees to come forward.
Lara Joseph, a spokeswoman for the FCA, declined to comment.
Unlike in the U.S., whistle-blowers in the U.K. are not financially compensated for providing information on wrongdoing. Still, scandals such as manipulating benchmarks for interest rates and currencies, which have already culminated in traders’ arrests and more than $10 billion in fines for firms, may encourage employees to be more vigilant.