Whistleblowers in the banking sector are being legally gagged, hunted down and left bankrupt, despite reforms introduced after the financial crisis to protect them, the chair of the All-Party Parliamentary Group on Fair Business Banking has warned.
Speaking at a conference on banking, Lord Cromwell said in the British system, whistleblowers become “unemployable, they have their lives trashed, and they are heavily persecuted in the most intimidatory way”.
Citing rules in the US where genuine whistleblowers who disclose illegal activity are awarded a share of the fine imposed on their institutions, Cromwell said: “You pay for vermin control, so why do you expect people to do the right thing for nothing and then have their lives destroyed.”
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Tougher whistleblowing rules was introduced after the 2007-2009 financial crisis, “but they stop short of offering financial rewards”, says Reuters.
As well as the all-party group which is looking into how whistleblowing is working, the industry is also waiting to see how the Financial Conduct Authority deals with attempts by Jes Staley, chief executive of Barclays bank, to unmask a whistleblower’s identity.
Increasing opportunities for speaking out anonymously and a “re-employment” scheme for staff who lose their jobs have both been suggested as alternatives to financial reward.