Canada Makes First Securities Fraud Whistleblower Award
The Ontario Securities Commission (OSC) announced last week roughly CAD $7.5 million in whistleblower awards to three individuals who reported violations of Ontario securities laws. The awards are the first ever by a Canadian securities regulator. In keeping with its commitment to protecting the confidentiality of whistleblowers, the OSC did not disclose any information that might reveal the whistleblowers’ identities.
Under the OSC Whistleblower Program, individuals who voluntarily provide quality and timely information on securities violations, leading to successful enforcement actions by the agency, are entitled to share of the government’s recovery. The range for potential awards is 5% to 15% of the total monetary sanctions ordered and/or voluntary payments made, up to a maximum of CAD $5 million (or CAD $1.5 million if the recovery is less than CAD $10 million).
The program is the first of its kind for a securities regulator in Canada. In addition to the OSC program, the Canada Revenue Agency has a whistleblower program for tax fraud. The Offshore Tax Informant Program offers awards to whistleblowers if the information leads to a compliance or enforcement action which results in the collection of more than CAN $100,000 of federal tax. The potential award amount is 5% and 15% of the tax collected.
In the press release announcing the OSC awards, the agency highlighted the importance of whistleblowers to its enforcement regime. According to OSC Chair and CEO Maureen Jensen:
Our Whistleblower program has proven to be a game-changer for the OSC’s enforcement efforts. This would not be possible without courageous individuals willing to come forward and provide valuable information about harm to Ontario’s capital markets.
OSC Director of Enforcement Jeff Kehoe strongly echoed this sentiment:
Whistleblowers expose complex securities misconduct that may not otherwise come to light, allowing us to take timely action. We hope this announcement, alongside our substantive whistleblower protections, will encourage more whistleblowers to come forward.”
It remains to be seen whether these awards are just the beginning of what might ultimately become a whistleblower program as successful and prolific as the SEC Whistleblower Program in the U.S. Given the OSC’s trumpeting of these inaugural awards and the agency’s whistleblower program more broadly, it would certainly appear that we can expect more awards to follow.
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