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FCA takes ‘significant action’ in less than 1% of whistleblowing cases

The FCA took “significant action to mitigate harm” in less than one per cent of whistleblowing reports last year.

In the year ending 31 March 2019, the City watchdog handled 1,119 whistleblower reports. While less than one per cent of those sparked “significant action”, the majority of cases are still being assessed and could result in action at a later stage.

Data from the FCA’s Annual Report and Accounts 2018/19 published last month showed:

  • in 10 cases it took significant action to mitigate harm
  • in 85 cases it took action to mitigate harm
  • 195 cases helped to inform the FCA’s work and were relevant to the prevention of harm, but did not lead to any specific action
  • 144 cases were not considered relevant to the prevention of harm
  • 685 cases are still being assessed

In the cases where the FCA took “significant action” – the reports from informants resulted in or assisted investigations.

While the regulator could not comment on specific cases, Money Marketing understands that the FCA decided to take “significant action” when intelligence received led to redress schemes, changes in business models, variations or removal of permissions, enhanced supervisory oversight of the firm, change in firm culture or to a refusal of an application.

In the 85 instances where the whistleblowers’ accounts led the FCA to “take action” these included – contacting the firm in relation to the allegations (even if not proven), supporting, or corroborating existing cases in supervision. These reports were also relevant to current, or planned, thematic or multi-firm work or over the coming six to 12 months, or supported decision making for existing case in authorisations/permissions.

Last week, the FCA came under criticism for its whistleblowing framework and was accused of “window dressing” by some whistleblowers.

In a report published by the All-Party Parliamentary Group for Whistleblowing, informants revealed some of the grievances they had with the FCA based on their experience of providing intelligence to the regulator.

Alleged shortcomings of the FCA included its failure to act on disclosures, lack of a clear time plan to act as well as the lack of transparency about the process, absence of any feedback or insufficient protection for informants.

The report noted that some of the criticism of the FCA’s framework was a result of “heightened expectations” which arose from the introduction of additional whistleblower protections to allow safe reporting.

In its annual report, the FCA said it was increasing resources in its dedicated whistleblowing team and has rolled out training to ensure its staff, who consider whistleblowing intelligence, act on it appropriately.

It said: “We have also been reviewing our practices on an ongoing basis, to ensure we maintain whistleblower confidentiality, track whistleblowing intelligence properly, and share it across the FCA.”

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