International - Written by on Monday, June 11, 2012 0:41 - 1 Comment

SFO Confidential phones ring off the hook as whistle-blowing industry gains momentum…but no investigations yet

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A whistleblowing ‘hotline’ launched by the Serious Fraud Office (SFO) in November is receiving more than 100 calls a month, according to research by international law firm Pinsent Masons.

Data obtained from the SFO indicates that the UK enforcement agency has received 350 calls to the hotline in the first quarter of 2012 alone. A further 288 tip-offs were received by e-mail or post.

The importance of whistleblowing to enforcement agencies should not be understated.  The recent Olympus case is a good example of what can happen.

As the US Securities & Exchange Commission says “assistance and information from a whistleblower who knows of possible securities law violations can be among the most powerful weapons in the law enforcement arsenal of the [SEC]. “

The SFO statistics underscore again the likelihood that wrongdoing impacting UK PLC will be revealed by a whistleblower.

The view from across the pond

In the US whistleblowing is taken very seriously.   The US SEC has created An Office of the Whistleblower.  In contrast to SFO Confidential where there are no rewards, in a throw back to the days of the Wild West, in the US whistleblowers who come forward with original information that leads to an SEC enforcement action with over $1,000,000 in sanctions can earn between 10%-30% of the amount collected.

Penalties in the US can run into hundred of millions of US$.

In November last year the SEC published its first report showing whistleblowers under the new Dodd Frank Act.

UK whistleblowers in search of massive rewards have already taken advantage of the new US whistle-blowing scheme.  In the first three months of the US scheme Under the UK and China topped the chart of non US whistleblowers accounting for nearly 30% of the total.  The US routinely shares information with the UK.

Unsurprisingly, in the US whistleblowing has become an industry in itself.  Forget anonymous phone calls – against a backdrop of lucrative rewards individual whistleblowers (or ‘claimants’) are filing lengthy submissions prepared by lawyers with the SEC supported with corresponding copy documents.  Likewise corporates are shopping competitors engaging in unfair business practices.

While the SFO has confirmed that no cases have yet been accepted for full investigation as a result of the hotline – it’s only a matter of time.

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Weekly Roundup | i-Sight Investigation Software Blog
Jun 22, 2012 5:02

[…] SFO Confidential phones ring off the hook as whistle-blowing industry gains momentum…but no invest…: Barry and Richard, thebriberyact.com, report on the whistleblower hotline launched by the SFO that is apparently receiving over 100 phone calls a month. […]

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