On February 13, Nick Ephgrave QPM gave his first public speech as Director of the United Kingdom Serious Fraud Office (SFO), during which he expressed a desire to pay awards to financial fraud whistleblowers in the U.K.
“I think we should pay whistleblowers,” said Ephgrave.
The SFO and Financial Conduct Authority (FCA) have historically been resistant to the idea of whistleblower awards. As a whole, the U.K.’s current whistleblower system under the Public Interest Disclosure Act (PIDA) has been widely criticized by advocates.
In contrast to the U.K., the U.S. offers awards to financial whistleblowers through whistleblower programs like the one administered by the Securities and Exchange Commission (SEC). The combination of awards and anonymous reporting channels have proven to be immensely successful. Since the SEC Whistleblower Program was established in 2010, it has paid over $1..9 billion in whistleblower awards, as whistleblower disclosures have become a critical part of the agency’s enforcement efforts.
Notably, whistleblowers from outside the U.S. can qualify for awards under the SEC Whistleblower Program. According to data published by the SEC between 2011 and 2021, whistleblowers in the United Kingdom are flocking to report to the SEC Whistleblower Program. U.K. whistleblowers submitted 783 tips to the SEC over just those ten years – more collective tips than whistleblowers from any other country outside North America.
Ephgrave gave a nod to the well-proven success of transnational U.S. whistleblower reward programs in fighting fraud and corruption: “If you look at the example of the United States of America, their system allows [payment of whistleblowers], and I think 86% of the $2.2 billion in civil settlements and judgments recovered by the U.S. Department of Justice were based on whistleblower information.”
Director Ephgrave’s speech also coincides with a push in the U.K. to establish an independent Office of the Whistleblower. Whistleblower attorney Stephen M. Kohn, who has worked with WhistleblowersUK in advocating for the implementation of best practice whistleblower programs in the U.K. says, “the best way for the SFO to implement rewards while protecting the safety of whistleblowers is to pass the Office of the Whistleblower Bill.”
Kohn, a founding partner at Kohn, Kohn & Colapinto, has published extensive research on the efficacy of whistleblower rewards in fighting corruption and thinks that “it’s absolutely imperative that whistleblowers are treated fairly and consistently with the legal requirements that have proven remarkably successful.”
During the speech, Director Ephgrave acknowledged that the Royal United Services Institute (RUSI), where he was speaking, is conducting research on the concept of incentivizing whistleblowers.