The chair of the UK’s financial watchdog is being urged to resign after failing to adhere to its own rules regarding the protection of whistleblowers’ identities, heightening the pressure on the regulator during its annual meeting on Thursday.
Ashley Alder faced criticism in August following a report by the Financial Times that he had forwarded correspondence from two whistleblowers, revealing their names and details against their wishes, contrary to the Financial Conduct Authority’s (FCA) policy to protect such information.
Politicians, lawyers, and representatives of whistleblowers have accused the FCA of hypocrisy after an internal investigation into Alder’s handling of the internal complaints revealed that he “did not follow the policy to the letter,” though his intention was “simply to ensure that appropriate action was taken.”
Baroness Susan Kramer, the Liberal Democrats’ Treasury spokesperson in the House of Lords, stated, “When a regulator discloses the identity of a whistleblower, to me that is going to close down whistleblowing across the UK financial service sector. I think it is a resigning issue.”
Georgina Halford-Hall, chief executive of the campaign group WhistleblowersUK, described the investigation into Alder, led by FCA senior independent director Richard Lloyd, as “a very disappointing outcome.” She asserted that Alder must resign, questioning who would blow the whistle to the FCA if this situation persisted. Halford-Hall noted that there were already two reported cases of mishandled FCA whistleblowers and that several other cases were known.
Andy Agathangelou, chair of the Transparency Task Force consumer group, suggested that Alder should probably resign given the circumstances. However, he remarked that this issue was minor compared to other recent controversies involving the FCA. Agathangelou emphasized that many individuals had blown the whistle to the FCA and suffered repercussions.
Before the meeting, Agathangelou indicated his intention to protest outside the FCA’s London headquarters during Thursday’s AGM, which was being held online.
The FCA declined to comment on the calls for Alder’s resignation. On Monday, the regulator defended him, stating that he “reasonably took the view that he was providing information” already known to colleagues in order to seek advice and ensure correct handling of the issues.
The FCA described the two whistleblower cases as “highly unusual,” noting that both had pursued complaints over many years via various channels, some of which were public and not limited to whistleblowing concerns. The first whistleblower was dismissed from the regulator in 2021 for alleged misconduct and lost an employment tribunal case against the authority, which is currently under appeal. Concerns about alleged opaque hiring practices raised by this individual had prompted an internal review. The second complainant left the FCA several years ago.
The FCA stated that recent allegations brought by the whistleblowers to Alder mainly concerned the historical handling of their complaints. The review found that Alder acted “in the firm belief that there was no realistic prospect of causing harm to them in any respect.”
The regulator is already reviewing its internal whistleblowing process, describing it as “somewhat impractical.” Alder affirmed his commitment to taking their responsibilities to whistleblowers seriously.
It is uncommon for the FCA to take enforcement action for whistleblower breaches. In 2018, it collaborated with the Bank of England’s Prudential Regulation Authority to fine former Barclays chief executive Jes Staley £642,430 for attempting to identify an anonymous complainant.
Critics argued that the investigation into Alder was another instance of the FCA failing to uphold the standards it expects of those it regulates, thereby deterring whistleblowers from reporting frauds. Mary Inman, a lawyer at US firm Whistleblower Partners, criticized the FCA’s “failure to discipline its chair” as both appalling and hypocritical, especially considering the regulator’s own campaign to protect whistleblowers’ identities.
In the year ending March 2024, the FCA received 1,124 new whistleblower reports, up from 1,086 the previous year, with about a third of the whistleblowers choosing to remain anonymous.
