International - Written by Barry & Richard on Wednesday, November 19, 2014 14:35 - 0 Comments
Supergrass: UK No.1 non U.S. snitch under U.S. whistleblower reward scheme plus crazy disclaimers…
Bastion of fairness, the UK once famous for its green fields, cricket pitches and tennis courts borne out of the UK’s famously inclement weather is becoming famous for grasses of a completely different kind.
It may not be cricket to snitch. But who cares. When there is the possibility of a lottery win prize pot.
The FCA recently rejected the idea of a paid whistleblower program and David Green, SFO Director, has articulated that he is uncomfortable with bounties for whistleblowers.
Yet in the 2014 Dodd Frank whistleblower report published on Monday this week the UK is revealed as being No.1 globally for snitches outside the US and just misses being in the top 10 for whistleblowers under the program ahead of over 40 US states.
While UK regulators may be uncomfortable with the idea of paying for tips on the basis it isn’t cricket UK citizens have no qualms in shopping others.
Instead, they are piling in with information with dreams of claiming the potentially significant rewards and retiring to their own private island in the sun.
The report contains some fascinating stats and information.
International retirement planning: Largest award was given to a non US whistleblower in September 2014
“On September 22, 2014, the Commission authorized an award of more than $30 million to a whistleblower… This is the fourth award to a whistleblower living in a foreign country. In issuing the award, the Commission specifically noted that allowing foreign nationals to receive awards under the program best effectuates the clear Congressional purpose underlying the award program”
Know anyone, who appears to have a lifestyle which doesn’t match their income? Fraud could be the answer.
They could either be committing it or snitching on someone doing it!
No confessional: Individual With Compliance or Internal Audit Responsibilities Receives Award After Reporting Internally
“Under the whistleblower rules, information provided by persons with compliance or internal audit responsibilities is not considered to be “original information” unless an exception applies…exceptions permits such individuals to be eligible forwhistleblower award if they reported the violations internally to designated persons at least 120 days before providing the information to the Commission. In this case, the Commission applied this exception to permit an award to the whistleblower upon determining that the claimant had reported the information through the proper channels at least 120 days before reporting it to the Commission. “
You can’t trust anyone: Third parties and employees account for majority of whistleblowers
“To date, over 40% of the individuals who received awards were current or former company employees. Furthermore, an additional 20% of the award recipients were contractors, consultants, or were solicited to act as consultants for the company ….”
Ignore reports at your peril: 80% report after internal whistleblowing met with deaf ears
“Of the award recipients who were current or former employees, over 80% raised their concerns internally to their supervisors or compliance personnel before reporting their information of wrongdoing to the Commission. In these instances, the individuals reported information concerning possible securities violations to the Commission only after reporting the information internally and understood that the entity was not taking steps to address or remedy the violative conduct.”
On the up: Steady growth in tip-offs
“From Fiscal Year 2012, the first year for which we have full-year data, to Fiscal Year 2014, the number of whistleblower tips received by the Commission has grown more than 20%.”
And finally – crazy disclaimers!
It is standard fare that speakers from the SEC (and DOJ) at conferences say that the views they express on panels etc. do not represent the views of the Commission etc. We think this is probably overkill.
But. The 2014 whistleblower report raises the bar and contains the following disclaimer:
This is a report of the Staff of the U.S. Securities and Exchange Commission. The Commission has expressed no view regarding the analysis, findings, or conclusions contained herein.”
Come on guys.
Really? As a famous Wimbledon winner once said. “You *cannot* be serious!”