Is adverse publicity motivating whistle-blowers?
The publicity around alleged misconduct in financial services firms has fuelled higher levels of activity by employee whistle-blowers within those firms, according to Australian Securities and Investments Commission (ASIC) commissioner, John Price.
Price has told a university whistle-blowing conference that the activities of whistle-blowers appears to be a reflection of increased public dissatisfaction with financial services firms.
He said that in 2017-18, ASIC received and assessed 228 disclosures by whistle-blowers and that around two-thirds were in relation to allegations of corporate misconduct including corporate governance breaches or conflicts of interest.
“These are internally focused allegations about the operations and management of the company,” Price said. “Misconduct allegations about the provision of financial services and markets misconduct by a company or licensee makes up the other third.”
“From the last three financial years, we are seeing an increase in the proportion of whistle-blower reports about financial services and credit matters,” he said. “This has occurred at the same time as increased public dissatisfaction with the financial services and credit firms, and we are seeing this same dissatisfaction in the employees of those firms, with more coming to us with reports of misconduct.”
“In terms of matters that ASIC pursues through surveillance or investigation, around one-third of all whistle-blower reports being worked on in ASIC stakeholder and enforcement teams relate to the large financial services institutions, reflecting our priorities to improve the functioning of the financial system,” Price said.
Recommended for you
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
