Vulnerabilities, obstacles and risks in reporting financial crimes
As financial crimes have expanded both in terms of their volume and diversity and increasingly become transnational, so have the legal instruments which aim to counter them. In the context of financial crimes, traces and trails of financial crimes and transactions through legitimate/formal as well as informal institutions are crucial components in establishing any wrongdoing. While it is inherently difficult to detect and produce evidence to prosecute financial criminals, it is known that the preferred medium both for financial crimes and laundering the proceeds of such crimes is often legitimate financial institutions. In the UK, whistle-blowers who disclose non-confidential information are seen to be breaching the common law implied duty of good faith and fidelity. Traditionally, employees act as agents of their principals, their employers. The Federal Council has proposed a new clause in the Swiss Code of Obligations which protects whistle-blowers by exonerating them from their duty of loyalty if they report the matter internally first.