Whistleblower Laws in the Financial Markets: Lessons for Emerging Markets

This article argues that policy-makers in emerging markets with financial centers should adopt whistleblower policies and legislation in order to reduce economic crimes and protect investors. The authors chose the United Arab Emirates (UAE) as a case study because it is an emerging market with important regional financial centers, and it has a unique legal system that uses civil law, common law, and sharia law. Although the focus is on implementing a comprehensive set of whistleblower laws and policies in the UAE securities and commodities markets, the best practices that are outlined in this article are transnational in nature, meaning that the model we provide for blowing the whistle internally and externally can easily be adopted in other jurisdictions. The principles outlined in this article are particularly useful for policy-makers in emerging markets that are considering adopting whistleblower legislation. First, this article analyzes the current legal framework for protecting whistleblowers in the UAE under federal law and in Dubai under the new Dubai Economic Security Center Law. Second, it recommends that the UAE federal government adopt whistleblower legislation in order to reduce wrongdoing in their financial markets. Third, it analyzes whistleblower legislation in other jurisdictions in order to provide a comparative analysis and determine what the best practices are for protecting whistleblowers in the major financial markets of the world. In particular, this article analyzes and critiques the whistleblower legislation in the United States in order to provide a set of best practices for the UAE to adopt for their financial markets (in particular, the securities and commodities markets).