While the City watchdog has a lot of soul searching to do, let’s give credit where it’s due. The law firm Pinsent Masons says the FCA has successfully created a whistleblowing culture among the employees of the businesses it regulates.
The firm highlights the opening of 1,367 whistleblowing cases last year – a 44 per cent increase on 2013 and 142 per cent on 2012, the last year of the FCA’s predecessor, the Financial Services Authority. That’s rather impressive whichever way you look at it, and worthy of note at a time when the FCA is taking brickbats from all comers.
Michael Ruck, a former regulator who now works in enforcement at Pinsent Masons, credits the FCA’s focus on personal responsibility for changing people’s behaviour. Put simply, it is no longer acceptable to look the other way and leave miscreants to it. Where once people would have covered their backs by keeping quiet, the reverse is increasingly true.
But let’s not kid ourselves: those who do expose wrongdoing on the part of colleagues, or clients, are still taking a risk.
Financial services companies might now claim to encourage whistleblowing within the firm, but the danger of retribution is still ever present for those who choose to ring the alarm bells, particularly if they offend or endanger powerful people within their organisation. Careers and livelihoods are at risk. Sometimes you’re damned if you do and damned if you don’t.
It is for this reason that whistleblowers in the US are paid, and it should hardly come as a surprise that the highest number of non-US tip-offs finding their way to America’s Securities and Exchange Commission come from the UK.
In the event that a whistleblower has a choice, by working for a US company for example, the sensible option is to make a transatlantic phone call rather than one charged at local rates.
That needs to change. It’s true that the issue of payment is being kicked around in government, but it has spent an awful long time in the long grass of Whitehall.
Part of the reason is that there is a reluctance to reward people for doing the right thing.
But paying people for doing things they ought to do for free is hardly a new concept in this country. It happens all the time in the criminal justice system, for example.
Pinsent Masons has predicted a further surge in whistleblowing calls were it to be made a part of the financial police’s armoury. That should be reason enough for taking the step.Reuse content