Financial Crime World

Luxembourg Whistleblower Report Reveals Fraudulent Activities in Financial Sector

The Commission de Surveillance du Secteur Financier (CSSF) has published a report on the first whistleblowing reports of breaches of financial sector regulations in Luxembourg, providing practical guidance on how to follow the whistleblowing procedure.

Who Can Submit a Whistleblower Report?

  • Any individual with good grounds for believing that a breach of regulation has occurred can submit a whistleblower report directly to the CSSF.
  • This includes:
    • Employees or former employees of financial sector entities in Luxembourg
    • Customers of financial service providers

However, breaches that fall under the scope of criminal activity will be handled by the State Prosecutor.

The Whistleblowing Procedure

  1. Employees are encouraged to use internal whistleblowing procedures if available before contacting the CSSF directly.
  2. Whistleblowers can submit reports via:
    • Email
    • The European Central Bank’s (ECB) whistleblowing procedure

Requirements for Submitting a Report

  • Credible evidence must be provided
  • Reasonable grounds to believe that the information contained in the report is substantially true

Protection of Whistleblowers’ Identities

  • The CSSF will protect the whistleblower’s identity within the limits of applicable legislation.
  • However, employers may still discover their identity through cross-checking information.

Limitations and Commitments

  • The CSSF will not provide legal advice or inform whistleblowers on the actions taken on their reports due to its duty of professional secrecy.
  • The authority has committed to protecting whistleblowers’ identities and ensuring that breaches are investigated and addressed accordingly.

Findings and Concerns

The report’s findings have raised concerns about the prevalence of fraudulent activities in Luxembourg’s financial sector, highlighting the need for greater transparency and accountability. As the CSSF continues to monitor and address these issues, it remains to be seen what steps will be taken to prevent future instances of fraud and ensure the integrity of the financial system.

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