Last month, the Serious Fraud Office (SFO) — the UK’s main anti-fraud enforcement authority — issued new guidance to encourage corporations to self-report wrongdoing. In short, companies that disclose misconduct promptly, voluntarily, and in full cooperation with the SFO may avoid prosecution “unless exceptional circumstances apply.” The SFO’s push to create a corporate culture governed by compliance and transparency is admirable, to be sure. However, the wishy-washy language creates too much risk for those weighing voluntary disclosure. We probably won’t prosecute, but that all depends… rarely lures a bad actor to the negotiating table.
The fact is, when it comes to corporate crime, the UK hasn’t yet created appropriate reporting avenues for the wrongdoers or the witnesses. For years, the SFO has considered creating a robust whistleblower program to encourage individuals to come forward. Indeed, more than a decade ago, after seeing the promising early results of the SEC Whistleblower Program established under Dodd-Frank, the UK did a deep dive into comparable ways to incentivize and protect whistleblowers. But it’s never taken hold. The UK authorities continue to miss the mark, finding that getting paid to tell the truth calls into question the decency of the person who reports it.
At the end of the day, the focus needs to be on the integrity of the markets, not the purity of a whistleblower. If reporters of wrongdoing — whether corporate entities or employee whistleblowers — can’t mitigate the risk of coming forward, they’re just going to stay silent. And then, everyone loses.
US law enforcement got this right. With the relative certainty of a deferred prosecution agreement (DPA) for voluntary disclosures, companies have an easier time with the risk calculus. Similarly, with robust incentives and protections such as those offered under the SEC’s whistleblower framework, employees are similarly emboldened. The SEC and DOJ are doing everything they can to get to the truth.
To its credit, though at a slower pace, the SFO continues to sharpen the tools in its arsenal, developing more aggressive reforms to combat corporate crime. “Incentivisation reform”—which sounds a lot like over-the-pond speak for a whistleblower reward program like in the US — is said to be on the docket for 2025-2026. This would be an enormous policy development in tackling white collar crime, and a welcome one.
Read more: Tips on the Rise and Awards in the Billions: The SEC’s Office of the Whistleblower FY2024 Year in Review
Dave Jochnowitz is co-chair of the whistleblower and retaliation practice at Outten & Golden.
