The United Kingdom’s Financial Conduct Authority (FCA) announced that it is seeking to improve the confidence of whistleblowers in its whistleblower program. The FCA has been highly criticized by whistleblower advocates for its handling of whistleblower cases and its disinterest in paying monetary awards.
The FCA’s announcement follows a qualitative survey of whistleblowers conducted by the agency which found high-levels of dissatisfaction. In the survey, a majority of whistleblowers responded that they were “extremely or somewhat dissatisfied” with the FCA whistleblowing team in relation to listening and in relation to exploring the issues reported.
The FCA claims that it will improve the confidence of whistleblowers through the following actions:
- provide whistleblowers with more detail on what has been done with the information provided, or reasons for taking or not taking action
- improve the use of whistleblowers’ information across the FCA (eg making the best use of data and ensuring that end-to-end whistleblowing processes are as efficient as possible)
- enhance its webform – which is the most popular way for whistleblowers to contact the FCA – to fully capture every whistleblower’s disclosure
- engage with the Department for Business and Trade to support a review of whistleblower legislation to enhance the wider whistleblowing system
“We need the intelligence whistleblowers provide to identify and act on problems in the firms we regulate,” said Therese Chambers, Executive Director of Enforcement and Market Oversight. “We want to make sure we’re capturing and using the information provided by whistleblowers as effectively as possible, and to give them as much information as the law allows on how we have acted on their concerns.”
Over the past decade, while the FCA has failed to inspire confidence in whistleblowers, the United States’ Securities and Exchange Commission (SEC) has become hugely successful. It is unsurprising to whistleblower advocates, therefore, that corporate whistleblowers in the UK flock to the SEC Whistleblower Program. According to SEC data compiled by the whistleblower law firm Kohn, Kohn & Colapinto, from 2011 through the 2021 fiscal year, the SEC received 699 whistleblower tips from individuals in the U.K., more than any other foreign country.
Whistleblower advocates suggest that these statistics are indicative of the U.K.’s failure to properly protect and incentivize corporate whistleblowers. The FCA has explicitly decided to not offer monetary awards to whistleblowers. Furthermore, the U.K.’s primary whistleblower protection law, the Public Interest Disclosure Act of 1998 (PIDA), is, according to whistleblower advocates, an outdated law which does not properly protect whistleblowers.
“The FCA has a terrible record on whistleblowing. Whistleblowers should not trust the FCA, which has issued false and misleading reports on whistleblower laws in the past,” whistleblower attorney Stephen M. Kohn told WNN in 2021. “Whistleblowers with information on publicly traded companies, foreign bribery, bank frauds, money laundering and tax evasion should contact the U.S. regulatory authorities, where their identity can be fully protected, and they can qualify for rewards. The FCA must reverse its anti-whistleblower positions before they can be trusted.”
Further Reading:
FCA sets out steps to improve whistleblower confidence
As FCA Fails to Offer Awards, Whistleblowers from UK Flock to SEC