276% rise in financial whistleblowing since 2007
The number of potential whistleblowers contacting the Financial Services Authority (FSA) for help has increased nearly threefold in recent years.
Information obtained under the Freedom of Information Act by global investigations firm Kroll Advisory Solutions shows a rise of 276% since 2007 in the number of contacts to the FSA whistleblowing helpline. The FSA was contacted by 3,733 people in the year leading up to May 2012, compared with 994 calls made in the year leading up to May 2008.
According to Kroll, almost one in five of its corporate investigations in the last year was prompted by a whistleblower—of which 60% were upheld, and 19% were found to be malicious or revenge-driven.
It says the increase is likely to be due to three factors: rising financial crime; the fact it is easy to create electronic identities and therefore easy to perpetrate fraud; and the development of clearer and more established procedures for whistleblowing and protection for whistleblowers.
Benedict Hamilton, managing director at Kroll, says: “Whistleblowing cases are becoming much more common and they can be hugely significant for companies; we have investigated cases where losses of up to £1bn have been reported by a whistleblower.
“As companies increasingly invest in often risky emerging markets and individuals see criminal opportunities made possible by the advancement of technology, we believe cases of whistleblowing will continue to rise. The increase in these cases is also being driven by the introduction of more stringent regulation and guidance governing whistleblowing procedures.
“It is crucial that companies respond very quickly and in an appropriate manner to a whistleblowing allegation to understand the facts behind it and ensure the best outcomes are achieved.”
