Sky News City Editor Mark Kleinman has learned that Barclays is considering outsourcing the handling of the hotline it operates to allow employees to alert senior managers to potential malpractice. Such a move would be significant and break with established industry practices.
In the meantime, ex-UBS private banker Bradley Birkenfeld's $104m whistleblower payout will doubtless encourage others to come forward in the hope of obtaining untold riches for exposing wrongdoings at the firms. Forbes points out, however, that under Dodd-Frank, there is a provision that states that 'no award . . . shall be made . . . to any whistleblower who is convicted of a criminal violation related to' a securities enforcement proceeding in which the sanctions are collected.
Birkenfeld did jail time for his involvement in the alleged wrongdoing, but under the U.S. tax whistleblower statute, his conviction did not disqualify him from collecting an award. This could, however, all change when Dodd-Frank fully kicks in.
image: © Steven Depolo