Financial Conduct Authority  

No whistleblowers came forward on LCF and Blackmore, says FCA

No whistleblowers came forward on LCF and Blackmore, says FCA

The Financial Conduct Authority had not been approached by whistleblowers in either the Blackmore Bond or the London Capital & Finance scandals, its head of enforcement has claimed. 

Mark Steward told attendees at the regulator's annual public meeting today (September 28) the regulator had not received reports from anyone it would have classed as a whistleblower under the Public Interest Disclosure Act. 

Though the regulator did admit it should have treated other intelligence it had received in a more effective way. 

It comes as several groups and an independent report had accused the FCA of failing to handle third party information efficiently. 

Steward said: “Neither in the case of LCF nor Blackmore did we receive any whistleblowing intelligence from anyone who would be classed as a whistleblower under the Public Interest Disclosure Act, which is the legislation that governs the way in which whistleblowers need to be protected, and their identities kept confidential.

“All our staff are trained to identify with suppliers, including our staff who man the call centre in the supervision hub, and we take all whistleblowing intelligence very seriously.”

He said the FCA’s formal whistleblowing processes were designed to capture intelligence from whistleblowers who are required to be protected under legislation and to ensure the FCA is able to offer this protection.

Steward said these processes did not apply to LCF and Blackmore as no whistleblowers came forward.

At the same time chairman of the FCA Charles Randell apologised for errors made in the regulator's response to LCF, saying the regulator has “put in place action plans and the board of the FCA is monitoring progress closely”.

London Capital & Finance entered into administration in 2019 owing more than £230m and putting the funds of some 14,000 bondholders at risk.

An independent investigation into the FCA’s handling of LCF by Dame Elizabeth Gloster, published in December, rebuked the regulator for "significant gaps and weaknesses" in its policies and practices and said the watchdog had failed to properly regulate the now collapsed company and that its handling of information from third parties regarding the business was "wholly deficient".

Asked by an attendee at the APM why the FCA did not take down Blackmore bonds, after being notified that they were a bad investment company by a reputable person, Steward said: “I think what the question is really asking here around the intelligence received in relation to LCF and Blackmore is that these rigorous disciplines that apply to the way in which we handle formal whistleblowing under the Public Interest Disclosure Act hasn't applied in the past to intelligence received from other third parties that is not formal whistleblowing intelligence.”

Steward admitted this was something the FCA should address.

He said: “This is one of the lessons of LCF, that we have lacked a broad triage for all other types of intelligence that we receive. And this is absolutely something that is front and centre in the transformation agenda.”