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SFO warns firms on rise of whistleblowers

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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.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. DPA’s may be intended for a particular purpose and I am sure it is the SFO’s interest to utilise these but there should be concern about criminal prosecutions being postponed indefinitely. Inland Revenue failed to criminalise tax evaders in Switzerland by using similar agreements and the public is right to be angry about this. Use all the spin you want Mr Green, you are creating a process for individuals to avoid prosecution by allowing companies and shareholders to pay them out of trouble and this is wrong!

  2. Could I also point out the tone and phrasing of the headline does not seem to support whistle-blowers as I would expect it to. Whistle-blowers have had a terrible time in recent years and far more should be done to encourage and support these people. The media has a big part to play in re-educating companies that whistle-blowers are not the enemy; greedy, short-cutting self serving employee and bosses are.

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