SFO warns firms on rise of whistleblowers


The Serious Fraud Office has warned firms that insiders are becoming increasingly willing to speak out against wrongdoing.

Speaking at a Pinsent Masons conference in London today, SFO director David Green said the organisation is increasingly using whistle blowers in its investigations.

He said: “Whistle blowers and insiders are playing an increasingly important role in our work. Be clear: we regularly receive reports from such sources and this is happening much more frequently.

“The increase in whistle blowing is something that a company debating whether to self-report to the SFO should think about very carefully. It greatly increases the risk to the company if it decides to keep quiet.

“We have more whistle blowers than self-reports, and it is whistle blowers that you should be worried about.”

Green added that the SFO is actively encouraging insiders to pass on information.

He said: “Increasingly if we announce an investigation we may specifically encourage contact by such sources.

“With the significant expansion of our intelligence handling and analytical ability, the SFO is now properly equipped to handle such information.”

Green also defended the length of SFO investigations.

He said: “The size, scale and scope of investigations means they take time. I don’t apologise for that.

“Some companies claim publicly that they are fully cooperating with the SFO, but there is cooperation and there is cooperation. It would be wrong, unjust and counter productive for the SFO to reward obduracy and lack of cooperation by offering some sort of settlement. We won’t give up and walk away, and we do get there.”

Green said that the first deferred prosecution agreements to be reached by the SFO are “imminent”.

Under a DPA, a prosecutor charges a company with a criminal offence but proceedings are automatically suspended and the company agrees to a number of conditions, such as paying a penalty and compensation.

The SFO was granted powers to agree DPAs in February 2014 but has yet to reach such a deal.

In October, Sky News reported Tesco was in talks with the SFO to settle a criminal investigation into its accounting errors through a DPA.

Green said: “I anticipate that at least two DPAs will be completed this calendar year.

“Concern has been expressed by some that DPAs will be a method for companies to buy themselves out of trouble. These concerns are misplaced and premature.

“DPAs are intended as a mechanism by which the collateral damage to innocent parties – who may be shareholders, employees or customers – can be avoided in an appropriate case.”