British regulator told to apologise to RBS whistleblower

LONDON, Jan 16 (Reuters) - Britain's markets regulator has been told to apologise to a former Royal Bank of Scotland (LSE: RBS.L - news) employee after it offered "unconvincing" arguments for why it revealed his identity to the bank in a whistleblower case in 2013.

The Financial Regulators Complaints Commissioner, which handles complaints against watchdogs, said on Tuesday that the Financial Conduct Authority (FCA) had failed to take sufficient care to establish whether the complainant had sought anonymity.

"I have found some of the FCA's arguments unconvincing: they have sought to justify the disclosure (to the bank) through inferring reasons when there is no contemporaneous record to confirm it," said Complaints Commissioner Antony Townsend in a statement. But he stopped short of ordering any compensation.

The decision anonymised the name of the bank and complainant. But Steve Middleton, a spokesman for former RBS employee Mark Wright, confirmed that the case concerned Wright.

Wright has argued that the FCA should not have disclosed his name to RBS in 2013, after he made a series of allegations against the bank, because he had whistleblower protection.

Middleton welcomed the decision but told Reuters that Wright had battled the regulator for a "disgraceful" 10 months to establish that a whistleblower should be able to remain anonymous.

The FCA said in a statement that it accepted the recommendation that it apologise.

But it noted that relevant staff at the time were aware that the complainant had authorised a parliamentarian to raise the case with the bank and that he had disseminated details and allegations to bank staff, senior management, board members and public figures in 2012 and 2013.

It added: "The disclosure in question took place over four years ago and the FCA's policies to support whistleblowing now reflect the Commissioner's determination."

A RBS spokeswoman said the bank was aware of the concerns and that they had been thoroughly investigated and responded to. The bank has denied any wrongdoing.

(Reporting by Kirstin Ridley; Editing by Alison Williams)