“Absolute compliance.” A plea for whistleblowers

A recent judgment could scare away potential whistleblowers. However, the financial supervisory authority Bafin is working on an anonymous reporting option. Johannes Fiala and Peter Schramm, who consider whistleblowers to be very important, should approve of this.

Whistleblowers play an important role in monitoring the compliance of companies with the law – not least in the finance and insurance sector. This opinion is held by the Munich lawyer Johannes Fiala and the actuary Peter A. Schramm, who therefore also welcome a contact point for whistleblowers set up by the Financial Supervisory Authority Bafin.

Their plea for the whistleblower and the offer of Bafin has become explosive against the background of a recent ruling by the Bochum Regional Court: According to experts, the court has made the situation more difficult for employees who want to ease their conscience and point out massive abuses at their employer. Their names could become known, which could deter potential whistleblowers.


Bafin would like to make information anonymous

According to the Handelsblatt, the court has allowed public prosecutor searches and confiscation of documents from compliance ombudsmen as lawful. The judges justified their decision by stating that there was “no client-like relationship of trust worthy of protection” between whistleblowers and ombudsmen. This did not apply even if the ombudsmen were external lawyers. It is well known that lawyers otherwise have a right to refuse to testify in order to protect their clients.

In principle, the investigating authorities can also demand that the Bafin provides the names of whistleblowers in the course of investigations, who can contact the authorities in writing, by telephone, in person or by e-mail. However, the regulator is working on the possibility of anonymous reporting, as a spokesman told FONDS professionally ONLINE. This means that the public prosecutors would also be excluded from searches by the authorities – the whistleblower remains protected.


Compliance with the law has priority

For Fiala and Schramm this is certainly good news. “Absolute adherence to the law not only has the advantage of a healthy sleep. It is a high goal: As hard as it is and as much as you have to deny yourself and as sorry as you feel for friends, colleagues and superiors: If the law requires it, then such motives and loyalty to the employer who is unfaithful to the law must take second place,” they demand unequivocally in a commentary. An employee would then have to overcome himself, rise above himself, and report to the Bafin as a whistleblower.


The two experts have more pro-arguments up their sleeve. For example, a whisteblower could use the information to force his employer to maintain the necessary staff to meet all regulatory requirements. It is true that hardly any bank or insurance company is in a position to permanently comply with all supervisory regulations in particular. It is therefore inevitable that some of those rules will be infringed. Employees have had to support this up to now. However, the fewer employees in the relevant department, the more often such violations occur. If the employer knows about the vigilance and honesty of his staff, he will hardly take the risk of deliberately understaffing.

And last but not least, the whistleblower could also promote his own career, or better: not to put it at risk, both think. “If he does not report violations, he must expect that someone else will report him as an accomplice”, say Fiala and Schramm.


by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm


by courtesy of

www.fondsprofessionell.de (published on 12.10.2016)



Link: http://www.fondsprofessionell.de/news/recht/headline/absolute-gesetzestreue-ein-plaedoyer-fuer-whistleblower-127824/


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About the author

Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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