City regulator has created a whistleblowing culture

27 Mar 2015 | 03:39 pm | 1 min. read

The FCA has seen a 44% increase in the number of whistleblowing cases opened last year, according to international law firm Pinsent Masons.

Data obtained from the Financial Conduct Authority by Pinsent Masons shows that 1,367 whistleblowing cases were opened last year, representing a 44% increase on 2013 and a 142% increase on 2012, the last year under FSA supervision.

Last year 73% of the whistleblowing cases reported to the FCA led to intelligence reports being opened.

Michael Ruck, a senior financial services enforcement lawyer at Pinsent Masons and formerly with the Financial Conduct Authority says:

"There is no doubt that staff at authorised firms have become more aware of their compliance obligations. The FCA's focus on personal accountability is changing people's behavior and creating a culture where people will 'cover their backs'. 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.

Whistleblowing figures published by the SEC* show that the majority of whistleblowing reports it has received from overseas come from the UK, suggesting that the UK is not only more aware of its responsibilities but also that individuals/firms in the UK will blow the whistle in an incentivised regime more than any other country.

Should incentives for whistleblowers be introduced as a result of the ongoing review by The Home Office and BIS on this issue this would almost inevitably lead to a further surge in whistleblowing as white-collar informants seek big payouts. One can only wonder about the size of such potential payouts with the SEC last year paying out a record high of more than $30million to a single whistleblower.

Now more than ever firms need to make sure that they have an appropriate regime in place to help identify issues and remedy them before they become a significant regulatory or legal failing.”

Number of whistleblowing cases raised by the FSA/FCA

2009

2010

2011

2012

2013

2014

276

524

470

565

948

1367

 

Number of intelligence reports created

2012

2013

2014

Figures not readily available

868

1003

 

A case is created, and a case number allocated, to each whistleblower who provides information that falls within the FCA whistleblowing process.  Not every whistleblowing case leads to an intelligence report being created. 

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