Reporting suspicions of money laundering and ‘whistleblowing’: the legal and other implications for intermediaries and their advisers

Abstract

Examines the status of regulation and protection of whistleblowers in Australia, focusing on intermediaries and their advisers in financial services. Outlines the ambivalence of the legal system as far as whistleblowers are concerned, and the considerable risks they take, with examples of victims; case law is scanty. Points out the limited nature of protection in specific legislation, which is limited to four states and the ACT; but finds some protection in financial services legislation, including the Corporations Act 2001, the Financial Transactions Reports Act 1988, the Proceeds of Crime Act 1987, and the Trade Practices Act 1974. Makes some recommendations for encouraging continued whistling in the interests of an informed market for financial services, and cites UK and US legislation for comparison.

Determinants of fraud losses in nonprofit organizations

“…One increasingly common approach in the public sector is anonymous hotlines (Flesher, 1999;Kaplan and Schultz, 2007). Given potentially negative consequences for whistleblowers, anonymous reporting is a protective outlet (Latimer, 2002;Trevino and Victor, 1992). Organizations with anonymous reporting are less likely to experience large losses (Holtfreter, 2004;Lewis, 1997).…”

Fraud in US organisations: an examination of control mechanisms

“…Other potentially devastating consequences for whistleblowers include the possibility of legal action for slander. 15 Given the many negative outcomes for whistleblowers, anonymous reporting mechanisms provide a protective barrier with the goal of encouraging and ultimately increasing reports of fraud. Since anonymous reporting mechanisms are a fairly new form of control, little is known about their success in detecting fraud.…”

The Lawyer as Gatekeeper: Is There a Need for a Whistleblowing Securities Lawyer? Recent Developments in the US and Australia

“…24 Accountants 'cannot book such circles as sales without two legal opinions, a true-sale opinion and a non-consolidation opinion'. 25 However, legal opinions from the various banks Law & Public Policy 195,197 (reporting that the 'First Interim Report of the court-appointed examiner for the Enron bankruptcy proceedings makes clear that the accountants sought out and relied on the guidance of lawyers when trying to determine if certain transactions should be booked as sales or something else. Enron had to provide outside counsel and from Enron's lawyers approved of the round-and-round deals and thus provided a cover of legitimacy.…”