The former acting chief executive of the Financial Conduct Authority has said the regulator acted properly in the case of a small business lobby group which was not treated as a whistleblower.
Tracey McDermott’s comments come after concerns were raised by not-for-profit business lobby organisation SME Alliance which accused the FCA of betraying the confidence of whistleblowers, including the Alliance itself.
This issue has since been taken up by the Treasury Select Committee, with its chairman Andrew Tyrie quizzing new FCA chief executive Andrew Bailey on how the regulator treats whistleblowers.
Writing to Mr Tyrie before she left the FCA in July, Ms McDermott said the SME Alliance should not have been treated as whistleblowers.
She said: “I should reiterate that we are satisfied that we acted properly by not treating the cases presented to us by the SME Alliance as whistleblowing matters.
“In these cases, the individual customers or their representatives had themselves disclosed their identifies and raised their concerns to the banks, prior to our carrying out any investigatory work.
“A number of the individual customers had also repeated their allegations in the press, and on social media.”
She added that the SME Alliance had also publicised its work with the FCA on Twitter and on its public website, as well as working with The Times.
On the issue of whistleblowing more generally, Ms McDermott said whether someone is a whistleblower or not will depend on a number of factors but anyone who is considered to be one will transferred to a specialist team which follows a set process.
Responding to Ms McDermott’s latest letter, Mr Tyrie said: “The FCA was not clear whether it would treat the SME Alliance as whistle-blowers. In his evidence to the committee last month, Andrew Bailey seems to appear to agree.
“The regulator needs to grasp what’s needed to create an appropriate environment for whistle-blowers.
“Mr Bailey’s appointment is an opportunity further to implement the recommendations of the Parliamentary Commission on Banking Standards, designed to ensure that whistleblowing will play a role in improving conduct in financial institutions.”
At the start of this month the Financial Conduct Authority denied it used an internal intelligence database to prevent a whistleblower from working in the sector.
The regulator admitted the database exists, and that it is consulted when an employer applies to the watchdog to gain approved status for a future employee.
Individuals on the database are flagged as ‘non-routine’, meaning a notification is sent to the employer that more information is needed than usual before the FCA will consider granting the individual the right to work in financial services.
