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Tom Fox: Where are England’s whistleblowers?

The case of Barclays chief Jes Staley attempting to unmask an anonymous whistleblower came to an almost imperceptible and silent ending recently when the UK’s Financial Conduct Authority concluded that Staley’s actions were not done intentionally but apparently with some other, lesser standard.

According the Financial Times, in an article entitled, “Watchdogs found wanting over whistleblowing,” Staley was found both “fit and proper” to do his job and was not judged “with a lack of integrity” when he twice ordered company employees to provide to him the name of a whistleblower who complained about a senior executive Staley had recruited to Barclays. 

There is an open issue of some fine which could still be levied against Staley by the FCA but the sanction of termination is no longer on the table.

What does this say about the desire of UK authorities to protect whistleblowers?

Quite clearly the message is that there is no serious sanction for trying to unmask anonymous whistleblowers. The FT article quoted Erika Kelton, a lawyer at Phillips & Cohen who specializes in whistleblower cases: “Simply put, it’s a victory for executives who brook no challenges to corporate behaviour and a loss for employees who do nothing more than express concern over company conduct.”

An unnamed director at a rival European bank was even starker when he said, “Next time the FCA comes to me and says you did this thing wrong, I will just ask how that ranks on the scale compared to what Jes did . . . they have made a pragmatic decision, not a principled one.”

All of the above may be one of the reasons whistleblower complaints are significantly down at the FCA. In 2014-15 the agency had some 1,340 reports. But by 2016-17 the number had dropped to only 900.

Internally at Barclays it can only be assumed employees have gotten the message to keep their heads down and do not try and raise concerns to senior management, especially if they will rise to the chief executive level.

On the other hand, Barclays is still under investigation by the state of New York Department of Financial Services for the same conduct by Staley.

The FT piece ends with the incredibly dry-witted quote from another anonymous lawyer, “They take whistleblowing issues so much more seriously in the states.”

____

Tom Fox is the Compliance Evangelist™. He leads the social media discussion on compliance with his award-winning blog, The FCPA Compliance and Ethics Blog and eight podcasts; The FCPA Compliance Report, Compliance into the Weeds, Everything Compliance, This Week in FCPA, 12 O’clock High-a Podcast on Business Leadership, Compliance Report-International Edition, Countdown to GDPR and Across the Board. 

He’s the author of 12 books on compliance, ethics and leadership, including the international best-selling “Lessons Learned on Compliance and Ethics” and “Best Practices Under the FCPA and Bribery Act” and his series Fox on Compliance. His book “The Complete Compliance Handbook” will be published by Compliance Week in April 2018. It is available for PreSale by clicking here.

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3 Comments

  1. I would agree the case concerning Barclays is concerning to say the very least. You do have to be cautious when comparing the UK to the US. I spent many years leading the UK's law enforcement efforts to apprehend corrupt elites laundering their money through the UK, our approach to the US was quite different, they – many of whom were and still are my good friends – chased the money whilst we put the hard miles in trying to lock-up the kleptocrats and then take their money from them. At the same time the US was having some great successes enforcing the FCPA whilst the Serious Fraud Office was starting from a low base and trying to build-up their cases.

    2018 and where are we? Well the SFO has procedures to manage whistleblowers and other areas of law enforcement too, and I know they do a good job of it. OK, the UK doesn't hand out the vast rewards the US system has adopted, neither does it levy huge fines. Both have their advantages and disadvantages. Whilst the actions of the FCA are seemingly wrong in this instance please don't believe that is the case across the board. Under the leadership of their former Director David Green the SFO have gone from strength to strength. They have taken on cases that frankly no one else in the UK would be capable of doing. I suspect they have quietly managed whistleblowers, protected them and know they have brought offenders to justice.

    The UK is out there doing it's bit, often with a fraction of the resources our US colleagues have. There is a lot still to be learnt and of course, improvements can always be made.

  2. they don't exist because the justice system in England is to protect the company, in 2014 I filed a legal action against a petroleum company that was doing money laundering out of Brasil stealing from their employees there, I lost the case because the judge never saw the scheme, the judge admitted that if the case was in brasil , the result will be totally different.

    regards

  3. I largely agree with Jonathan Benton. I think that proper protections and not official bribes should be provided to whistleblowers. Very recently, I whistleblew on an errant FCA regulated firm and the FCA support infrastructure was excellent. I was not in the slightest bit influenced by there being no financial reward from FCA


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