Britons rank second in US whistleblowing league

Britons rank second in a list of non-US nationals most keen to tip America's regulators off about suspected financial crime, according to the first annual report on the Securities & Exchange Commission's whistleblower program.

Britons top the ranking among Europeans, over the recorded 12 months. They were outnumbered in the foreigners' ranks only by the Chinese.

The Dodd-Frank Whistleblower Program stemmed from "a series of scandals that were either undetected or unreported, from Enron until the legislation was passed, including the Madoff scandal," said Jordan Thomas, chair of the whistleblower representation practice at lawyers Labaton Sucharow.

Americans blew the whistle the most in its first year to 30 September with 215 cases. Britons reported nine times.

Thomas, who spearheaded the SEC's program while working as assistant director in the Commission's Enforcement Division, said tip-offs came from across the financial industry.

"It is high level and well-placed individuals, who have furnished strong corroborating evidence, such as contemporaneous emails and other important documents."

Under the program, whistleblowers whose tips lead to fines of at least $1m can receive from 10% to 30% of the total.

Based on optimistic expectations that all nine UK tip-offs end in sanctions of at least $1m, Britons could reap at least $900m, or 10% of total sanctions, from their actions.

The rules only took full effect in August 2011, so the total of 334 hotline tip-offs registered in the first annual report actually came in barely seven weeks to 30 September.

The highest proportion (16%) related to market manipulation, followed by offering fraud (15.6%), corporate disclosure and financials (15.3%),and insider trading (7.5%).

First reported in IFAonline's sister title Investment Europe.