Questions over SFO Confidential

This entry was posted on Wednesday, November 16th, 2011 at 4:24 pm

The launch of the Serious Fraud Office’s (SFO) whistleblower service, SFO Confidential, caused stirs in many circles when it was announced. Applauded for its fundamental principles – dealing with corporate fraud in the UK – concerns have continued to be raised over how the service will be implemented.

Lawyers have now suggested that incentives should be put in place so that potential whistleblowers are more likely to come forward and anonymously report suspected cases of serious fraud. According to Risk.net, experts have said that an introduction of a bounty system similar to that instigated in the US could help reluctant informers break their silence.

The worry, they say, is that if such incentives aren’t put in place, the service will be rendered ultimately redundant since individuals may value their current position within a company more highly than risking everything and subjecting that firm to intense and prolonged scrutiny from the SFO.

The Dodd-Frank Act in America enables 10%-30% of all monies recovered from corporate fraud to be given to the whistleblower who first brought the situation to the authorities. This, however, could cause problems in itself as there is an increased likelihood of instances where employees, with little or no basis for suspecting that serious fraud is taking place, report companies to the SFO that are entirely innocent.

The SFO is already stretched, and further pressures on their decreasing budget and limited resources could easily affect their rate of successful prosecutions. All of this indicates that SFO Confidential is a long way off being a service able to deliver on its objectives.

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