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Originally published: July 26, 2017
The first paid whistleblower program offered by a Canadian securities regulatorSecurities regulator A government agency that enforces the securities act in jurisdiction it has authority over. This act is made up of laws that establish rules for issuing and trading securities. The Ontario Securities Commission is the securities regulator for Ontario.+ read full definition started accepting tips earlier this month as the Ontario Securities CommissionOntario Securities Commission An independent Crown corporation that is responsible for regulating the capital markets in Ontario. Its mandate is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair and efficient capital markets and confidence in capital markets, and to contribute to the stability of the financial system and the reduction of systemic…+ read full definition (OSCOSC See Ontario Securities Commission.+ read full definition) opened its new Office of the Whistleblower.
“We have had a very positive response” says Kelly Gorman, Chief of the Office of the Whistleblower. “Awareness of the program is the key to its success. This is an investor protection program. If we can prevent securities misconduct from happening, we can help prevent investor losses.”
The Office of the Whistleblower was created to help the OSC identify and pursue violations of securities law, including insiderInsider Every director/senior officer of a reporting issuer; every director/senior officer of a company that is an insider or subsidiary of a reporting issuer; any person/company who owns or controls more than 10% of the voting securities of a reporting issuer.+ read full definition trading, market manipulation and fraudulent accounting. Tipsters who provide the OSC information that leads to enforcement action are eligible to receive a reward of up to $5 million.
Whistleblowers are eligible to receive between five and 15 per cent of the sanctions collected in successful cases. Rewards are capped at $1.5 million unless the case results in the OSC collecting sanctions upward of $10 million.
Whistleblowers can be a single person or a group of people who voluntarily provide high-quality information that contains timely, specific and credible facts regarding potential misconduct. This is not limited to just employees of a company but rather anyone who becomes aware of securities-related misconduct taking place in Ontario’s capital marketsCapital markets Where people buy and sell investments.+ read full definition.
They can even be culpable individuals who have been involved in the misconduct as well, though Gorman makes it clear that any whistleblower involved in the wrongdoing is not immune from enforcement action by the OSC.
Tipsters can also choose to remain anonymous by reporting through a lawyer, and are only required to provide the OSC with identifying information when it comes time to receive payment.
Gorman recognizes that whistleblowers often take high personal and professional risks in coming forward. The Office has established a number of protections for those who approach the Office, including maintaining confidentiality over information that may reveal a whistleblower’s identity, as well as measures to protect whistleblowers from reprisal from their employer.
“It is time to change the stigma of ‘whistleblowing.’ We believe that whistleblowers deserve to be protected and compensated for the personal and professional risks they take, and we have structured our program accordingly by including non-retaliation measures .”
Amendments to Ontario’s Securities Act make it a violation of securities law for companies to retaliate against a whistleblower and renders any contractual provisions that are designed to silence whistleblowers unenforceable.
While the OSC cannot reinstate employees who have been fired for providing information to the Office of the Whistleblower, it can fine employers who do so.
Gorman added that the new program is designed to strike a balance between making whistleblowers feel comfortable reporting misconduct and incentivizing them to report possible misconduct to their companies first.
She notes that companies with a strong culture of compliance should not fear whistleblowers, and instead recognize their role in assisting the company to identify and address wrongdoing.
Whistleblowers, industry participants and other stakeholders are encouraged to learn more about the Office of the Whistleblower at its dedicated website, OfficeOfTheWhistleblower.ca.