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Author: Scarinci Hollenbeck, LLC
Date: February 5, 2019
The Firm
201-896-4100 info@sh-law.comThe New York Division of Financial Services (NYDFS) issued guidance outlining principles and best practices that all entities regulated by the agency should take under consideration when designing and implementing their whistleblower programs. The guidance comes after the NYDFS fined Barclays Bank PLC and its New York branch $15 million for violations of New York Banking Law related to the bank’s whistleblower program.[1]
On January 7, 2019, the principles and best practices outlined in the Guidance apply to all NYDFS-regulated institutions “regardless of industry, size, or number of employees.”
The NYDFS notes that there is no “one size fits all” approach to whistleblower programs. Instead, policies and procedures should be tailored to the entity’s size, geographical reach, and line of business, among other factors. The NYDFS advises that the following principles are integral to an effective whistleblower program:
Businesses under the purview of the NYDFS should review the guidance in its entirety. The failure to implement and enforce a robust whistleblower program can not only lead to a whistleblower suit but also costly regulatory fines. Additionally, businesses should perform a risk analysis by reviewing existing whistleblower policies and procedures, all instances of whistleblowing reporting, and the Company’s responsive performance.
If you have any questions or if you would like to discuss the matter further, please contact me, Paul Lieberman, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
[1] According to the NYDFS investigation, Barclay’s CEO attempted to identify the author(s) of two whistleblowing letters, which violated Barclays’ established whistleblowing policies and procedures. According to the NYDFS press statement announcing the fines, “shortcomings in governance, controls and corporate culture relating to Barclays’ whistleblowing function permitted a sequence of events that potentially could have had a detrimental impact on the efficacy of Barclays’ whistleblowing program.”
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