Following another no doubt expensive gift-buying Christmas season, employees of US companies looking to replenish their bare bank accounts could do worse than look to their companies' conduct, and report any regulatory breaches to the Securities and Exchange Commission (SEC).
The SEC's Office of the whistleblower recently announced the pay-out of its largest award yet to an individual whistleblower - a huge $14 million reward. This is far and away the largest of the awards made under the programme to date.
The SEC's whistleblowing scheme is not currently replicated in the UK. The current scheme, adopted by the FCA and SFO in the UK, does not use financial incentives to encourage the disclosure of regulatory or criminal breaches.
Both the FCA and the Home Office have, however, recently announced that they will study the SEC's approach. They are looking to determine if aspects of the approach should be adopted in the UK. Although this is unlikely to lead to a similar "bounty" system anytime soon it does reflect a growing appreciation in the UK for the US style response to crimes and regulatory infringements. Deferred Prosecution Agreements are on the way and, in this writer's opinion, it is simply a matter of time before employers need to review their own whistleblowing policy and arrangements in the light of US experience.
In any event, some fairly controversial changes have been made to offer more protection to whistleblowers in the UK. These include:
the fact that a whistleblower was acting in bad faith does not cause any claim to fail, but does reduce the remedy that may be available to them, and
employers are now vicariously liable for co-workers' actions when, as a result of blowing the whistle, the whistleblower suffers detriment from a co-worker.
For more information please contact Rhys Novak, Partner