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Financial services whistleblowers 'being ignored'

Posted by: Laurence Simons 23/05/13

The culture of compliance that is expected to emerge in the financial services sector as a result of the harsh sanctions meted out to transgressors - as well as the public opprobrium they have faced - appears to be stalling somewhat.

While in-house lawyers have been drafted in to help international firms cope with the new regulatory landscape, and executives have made all the right noises about trying to change attitudes within their organisations, it seems whistleblowers are not being given the importance their information may deserve.

A study by UK whistleblowing charity Public Concern at Work with law firm Slater & Gordon found that 77 per cent of financial services whistleblowers are ignored when they tell their employer about their concerns, reports the Financial Times.

Cathy James, chief executive of Public Concern at Work, said that people in this situation are "not being listened to", no matter how symphonic their medley of wind instruments becomes.

"Companies should be receptive [to whistleblowers' complaints] . . . it saves them a lot of grief and hassle if they listen to problems," added Ms James.

The findings come just months after the City watchdog launched an investigation into alleged gas-price fixing, and hot on the feet of the Libor manipulation scandal - both of which involved intimations from whistleblowers in the lead up to the investigations.

Almost a fifth of whistleblowers in the financial services sector approach external regulators before their own employer, according to the report, indicating the importance of these independent adjudicators for the industry.

The key concerns raised by prospective whistleblowers were fraudulent or criminal activity, mis-selling and breach of company policy - all potentially litigious areas that should be of concern to in-house lawyers hoping their organisation can toe the regulatory line effectively and avoid being plunged into yet another scandal.