New whistle-blowing rules as FSA sees sharp increase in disclosures
The number of whistleblowing cases reported to the Financial Services Authority (FSA) has more than tripled since the beginning of the economic downturn. The FSA received 3,929 calls to its whistleblowing helpline in 2012, but four years ago it only received 1,186 calls, representing an increase of 231 per cent.
Analysts believe the rise can be explained by new opportunities in rapidly expanding emerging markets where regulation is less stringent, in tandem with possibilities for fraud presented by new technologies. Recent advances in guidance, procedures and protection for whistleblowers have also had a part to play.
In other research covering a similar period, almost one in five of the calls made were malicious allegations, it was reported. From 25 June 2013 if a case goes to tribunal and it's found that the disclosure was made in bad faith, the tribunal will have the power to reduce compensation by up to 25 per cent.
Whistleblowers are recommended to make a disclosure to their employer first unless they feel unable to do so - in which case they can go to an appropriate 'prescribed' body, such as the FSA. Carol Sergeant, chair of the whistleblowing charity Public Concern at Work, said it was good that more people were prepared to come forward, but 'very disappointing' that they felt they had to go to the FSA to get their concerns dealt with properly.
Commentators are urging companies to make sure they have robust whistleblower procedures in place, both to give employees confidence in their internal mechanisms, and so they themselves can respond as quickly as possible to any allegations. Undertaking the appropriate investigations swiftly can help reduce the likelihood of damage to reputation or finances.
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