SFO turns a deaf ear to whistleblowers

THE Serious Fraud Office has come under fire for launching just 12 investigations last year, despite receiving more than 2,500 reports of fraud or corruption from whistleblowers.

The figures, which are for the year ending June 2014, have raised fresh concerns that the SFO does not have enough money to do its job properly.

Law firm Pinsent masons has warned that ‘ it is possible that large numbers of credible cases are being shelved’.

The SFO’s whistleblower service – SFO Confidential – was set up in 2011 to provide anyone suspecting serious fraud or corruption with a clear point of contact.

Barry Vitou, partner at Pinsent masons, said it is unlikely that the SFO is carrying out comprehensive checks on the information that it receives, due to lack of funds.

‘it is surprising that so few whistleblower reports have translated into SFO investigations,’ he said.

‘Obviously not all reports will contain sufficiently high quality information – some may be without foundation – but the data does suggest that the SFO may lack the resources to pursue all the criminal cases that are available and that it is having to prioritise cases.’

The SFO was nicknamed the ‘Serious Farce Office’ by satirical magazine Private Eye after a series of blunders including the botched probe into the property tycoon Tchenguiz brothers.

its core funding has been cut from £35.1m in 2009-10 to £33.2m in 2014-15.

But it has received extra funds from the Treasury for ‘blockbuster’ cases such as Libor and, more recently, its probe into the manipulation of foreign exchange rates.

This has bumped up its total funding last year to £58.3m, which is up from £44.6m in 2009-10.

But critics have raised concerns that the SFO is still overstretched, after taking on a number of huge cases, including allegations Glaxo Smith Kline paid bribes to doctors in China, iraq and Poland.

Pinsent masons warned of the danger of failing to properly follow up on leads, pointing out that several high-profile investigations – including the Rolls-Royce bribery case and the probe into Barclays’ Qatar fund- raising during the financial crisis – came from tip- offs from whistleblowers.

Yesterday the SFO hit back and said it was set up specifically to investigate big fraud cases. it said it hands many leads from whistleblowers to other agencies, such as the Financial Conduct Authority and Action Fraud.

An SFO spokesman said: ‘The SFO very much values information from whistleblowers and all reports are assessed by our intelligence unit. inevitably, however, few of these contain material which would form the basis of an SFO investigation, as we were set up to specialise in only the most complex and serious cases.

‘if we cannot use the information, we pass it on to other law enforcement agencies where possible.’