Want to boost your Bonus? $14m to Give your Bank to the SEC or FSA

English: The U.S. Securities and Exchange Comm...

English: The U.S. Securities and Exchange Commission (Photo credit: Wikipedia)

Whistleblower tip-offs soar in the UK. Researchers have concluded that both United States and United Kingdom financial regulators have been receiving a record number of tips from whistle blowers in the financial industry. A combination of guilt, fear of personal persecution, and financial benefits has driven people who work with banks and financial institutions to offer valuable information to the authorities.

From January 1 to November 31st of the current year, there was a 72% increase in the amount of cases that were opened by the Financial Conduct Authority. This increase is compared to the number of cases that were opened in the previous 12 months. This April, the Financial Services Authority began supervising many of the financial companies that were implicated as a result of these tip offs.
This increase has been revealed thanks to the Kroll research team, which made a case to the FCA for a Freedom of Information right. They obtained documents that mention 254 new cases that were started in between November 2012 and October 2013 thanks to the information given out by whistle blowers. This compares to only 148 cases launched in the previous 12 months.
The number of cases is not nearly as high as the number of whistle blowers who have been talking with the FCA. There were 5,150 people who went to the FCA regarding some type of wrong doing on the part of a financial institution. This is in comparison to 3,813 people who gave similar information in the preceding year.Financial Incentives:

Whistle blowers are not talking to governments out of the kindness of their hearts. In the United States, the Securities and Exchange Commission has come up with a reward system for people who come forward with this information. After all, being a whistle blower typically means that a person can no longer work in the finance industry. There was a case in 2013 where $14 million was given to ONE whistle blower, after his testimony helped the SEC recover a huge amount of investor funds that had been “misplaced” by a financial institution.

There are rumblings in the United Kingdom that suggest a similar policy should be undertaken. They have asked the FCA to look into the possibility of giving out financial rewards, and whether that measure would increase the number and quality of whistle blower information. The FCA has data to suggest that there is an increase in market manipulation and fraud from financial institutions. There was a 43% increase in cases of supposed market manipulation. 117 reports were received the past 12 months, compared to only 83 in the 12 months before that. This jump in complaints coincided with the government’s agreement with Barclays, under which the firm paid a 290 million pound fine for their crime of trying to manipulate the benchmark rates.


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