Whistleblower demands apology from FCA over ‘inaccurate’ report

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A whistleblower whose identity was improperly disclosed by the chair of the UK financial watchdog has accused it of “factual inaccuracies” and trying to discredit the person behind the complaint in its report into the incidents.

The Financial Conduct Authority last month said its chair Ashley Alder “did not follow the policy to the letter” when he passed on key personal details about two internal whistleblowers to several of his colleagues. The regulator’s rules say a whistleblower’s identity should not be revealed without their consent.

A report by the FCA’s senior independent director Richard Lloyd largely cleared his chair, saying “his aim was simply to ensure that appropriate action was taken” and pointing out that both cases were “highly unusual” and related to long-running complaints.

But the second of the two whistleblowers, who left the FCA several years ago, told the Financial Times that they had asked the watchdog to correct its report, apologise for alleged errors in it and pay compensation for distress caused.

The regulator denied its report was wrong. But the fresh controversy threatens to put its whistleblower policy back in the spotlight only days after Alder refused to resign over the issue.

Lord Andrew Tyrie, a veteran Conservative peer, said: “The FCA does seem to stumble over the handling of whistleblowing. Its investigation needs not just to meet high standards but to be seen to have met them.” He added that it “would need examination” by parliament’s Treasury select committee.

Last month the FCA said the two whistleblowers had engaged in “extensive correspondence over a number of years, raising numerous issues via various channels, some of which are in the public domain and which were not limited to possible whistleblowing concerns”. 

It added that “the substance” of both cases “has been or is being dealt with through legal proceedings or other processes including internal investigations by appropriate teams within the FCA”.

The second whistleblower said this description was incorrect and designed to portray them as “a disgruntled ex-employee unfairly trolling the organisation”. 

“The reality is that I have simply brought to the attention of the FCA some weaknesses in its governance and controls” they said. “My persistence has resulted in the FCA changing its processes, updating its policies and issuing numerous corrections and apologies.”

In one of those cases, the FCA was rebuked by the Financial Regulators Complaints Commissioner in December for “unattractive behaviours, poor judgment and maladministration . . . which fall below the standards I would expect of the regulator”.

The whistleblower said last month’s FCA report made other inaccurate statements, including saying they had accused the chair of not keeping their identity confidential.

The FCA report said: “Following the first public allegation, a second individual came forward with a similar allegation as to the handling of their whistleblowing communication to the chair.” 

But the whistleblower said: “I have never made the allegation attributed to me and shouldn’t even have featured in Mr Lloyd’s review,” adding that they had only asked why Alder had shared their initial letter with the watchdog’s general counsel.

The whistleblower said their letter, which raised concerns about how an earlier complaint had been dismissed by the FCA, was “completely anonymised, specifically to make it easier for the letter to be shared”.

The FCA’s report said Alder forwarded “the emails that he received directly from these two individuals”. But the whistleblower said their letter was emailed on May 17 to the watchdog’s internal whistleblowing mailbox, not to the chair. 

In a statement to the Financial Times, the FCA denied its report was misleading, saying: “The review accurately described the individuals whose correspondence was considered.”

It added: “We recognise that the substance and nature of the correspondence from each individual was different and distinct. The substance of that correspondence did not have any bearing on the outcome of the review.”

But the whistleblower said: “The FCA was unprofessional in publishing the Lloyd report without giving me any opportunity to comment on the factual content that was relevant to me.” Although the FCA sent them a copy of the report an hour before it was published, they called for it to be “withdrawn, updated and re-published”.

The “jury is out” on whether Alder and Lloyd “exhibit the independence, curiosity and willingness to challenge the executive that one would expect of a FCA non-executive director”, the whistleblower said.