It appears less and less likely that the UK will follow the lead of U.S. regulators and offer rewards to whistleblowers when their tips initiate an enforcement action. A government response issued this week by the Department for Business Innovation and Skills, which follows a solicitation of public comments last summer, recommends against creating a similar bounty program.
In the U.S., Congress provided financial regulators, in particular the Securities and Exchange Commission, with new tools to encourage whistleblowers to come forward. The SEC, for example, can pay whistleblowers 10 to 30 percent of settlements in excess of $1 million. The rewards are drawn from an Investor Protection Fund, established by Congress, which has a current balance of more than $450 million. Although feedback on similar financial incentives was sought in the UK’s Call for Evidence, a caveat was included that “the government did not consider the evidence base strong enough to introduce this sort of system into the UK framework.” That view was reinforced by the majority of respondents.
