The furore engulfing the Financial Conduct Authority over its chairman’s failure to abide by its own whistleblowing policy has intensified after Ashley Alder resisted pressure to resign.

A review undertaken by Richard Lloyd, the senior independent director on the regulator’s board, and published by the watchdog on Monday found that Alder “did not follow the policy to the letter” when he forwarded emails from two whistleblowers to senior colleagues without removing the individuals’ personal details or obtaining their consent.

Lloyd concluded that Alder’s aim had been “simply to ensure that appropriate action was taken in respect of all the matters the complainants were raising” and that he had acted “in the firm belief that there was no realistic prospect of causing harm to them”.

However, Alder, 65, has attracted criticism for his actions, not least because the authority is responsible for policing whether financial services firms have appropriate whistleblowing arrangements in place. The regulator also encourages individuals to come to it directly to report wrongdoing by a firm or an individual and it promises to protect whistleblowers’ identities.

Kevin Hollinrake, the shadow business and trade secretary, called the episode “extraordinary. It seems odd to me that they’re not following their own process in terms of how they handle whistleblowers, given their responsibility for overseeing whistleblowing policies for all the organisations they regulate. He should consider...

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