The number of whistle-blowing reports, which generally are anonymous reports about irregular practices at supervised entities or which report about dubious providers or market practices, again increased significantly in 2021, by 7.2% to 298; this was a record level since the FMA’s web-based whistle-blowing system was launched in 2014. Approximately eight out of ten whistle-blowing reports submitted actually fall within the FMA’s supervisory mandate. Out of the 235 reports that related to the FMA’s scope of competence, almost one-third related to investment fraud, while just under a quarter expressed a suspicion of irregularities at banks. There was a significant increase in reports made in relation to securities (also around one-quarter), where in particular the reports related to potential transgressions in connection with the offering, trading and distribution of securities, such as market and price manipulation, insider trading and ad hoc reporting breaches. Other reports related to insurance undertakings, Pensionskassen (pension funds), accounting and the suspicion of money laundering. Whistle-blowing tip-offs in 2021 have led to ten investor warnings being issued, 32 notifications to the Public Prosecutor’s Office as well as large number of official procedures by the FMA as well as penal orders.
An important contribution for protecting against investment fraud
“Our whistle-blowing platform is an important source of information for the supervisor. In particular it is a very important – and often preventive – tool in the fight against investment fraud and dubious market practices. It allows irregularities to be detected at an early stage, thereby limiting the extent of or even preventing damage from occurring. It makes a valuable contribution to collective consumer protection,” remarked the FMA’s Executive Directors Helmut Ettl and Eduard Müller.
At least every second tip-off about investment fraud relates to offers about crypto assets and so-called virtual currencies. In such cases they are distributed and traded over dubious or even criminal online trading platforms on the Internet. They are many marketed over social media, such as Facebook, WhatsApp, TikTok or Telegram. Dubious trading platforms also offer contracts for difference (CFDs), foreign exchange trading (FOREX) as well as apparently automated trading with such kinds of apparent investment products. Note: the offering of binary options to retail investors is forbidden in the EU, while the offering of CFDs is strongly restricted in regulatory terms. 45 percent of tip-offs about investment fraud related to fraudulent offerings with traditional investment products such as shares or gold as well as different forms of advance payment fraud.
Secure and anonymous
The web-based whistle-blowing platform guarantees whistle-blowers complete anonymity on a technical level. Information is cryptographically encrypted, making it technically impossible for either the FMA or criminal prosecution authorities to identify the informer. An anonymised, and secure mailbox also permits anonymous communication between the authority and the whistle-blower, where the latter allows this.
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)676 88 249 516