Ontario Securities Commission Report on Successful First 5 Years of its Whistleblower Program Shows $43M in Total Sanctions/Voluntary Payments Thanks to Whistleblowers
Constantine Cannon applauds the Ontario Securities Commission Whistleblower Program on a very positive update on its performance from 2016 to 2022. Constantine Cannon attorneys have been following the development of the OSC Whistleblower Program with interest from the beginning, and we are pleased to represent participating whistleblowers. The March 9, 2023 report highlights the success of the OSC Whistleblower Program in its first five years and eight months, noting that whistleblowers contributed to successful cases against 19 respondents. These cases brought in a total of $48 million in monetary sanctions and voluntary payments over the five-year period. Eleven whistleblowers have received awards totaling over $9 million.
The OSC report reveals encouraging news about the Whistleblower Program’s reach and the profiles of whistleblowers to date. Thanks to the hard work of Program staff to spread the word, the number of whistleblower tips received annually has been steadily increasing with a 17% average annual increase in tips. (Our own Mary Inman did her part to publicize the program, participating in a panel alongside OSC Whistleblower Program senior forensic accountant Shaifali Joshi-Clark in 2021. Mary chairs the Advisory Board of Whistleblowing Canada Research Society, which organized the event.) Fiscal year 2022 saw 89% more tips than the Program’s first full fiscal year. And tips are not just from Ontarians; the Program welcomes whistleblowers from around the world and has received tips from 30 countries on six continents. Interestingly, the majority of whistleblowers so far have not been insiders. Individuals like accountants, analysts, and even investors, including short sellers, can use their skills and expertise to zero in on evidence of wrongdoing hidden within public information. Among the successful whistleblowers were those who submitted tips individually as well as joint whistleblowers who submitted tips jointly.
In addition to showcasing the Program’s current strengths, the update includes positive signs for the future. Currently, rewards for whistleblowers range from 5 to 15% of the total monetary sanctions ordered and/or voluntary payments made, but they are capped at CAD $5 million. Even if the OSC cannot collect from the respondent(s), whistleblowers can still be paid up to CAD $1.5 million of the award amount. All whistleblowers thus far awarded more than CAD $1.5 million have been paid their full award amounts. The number one item on the “Looking Ahead” list in the report is “enhancing our recognition of whistleblower contributions, such as by issuing awards in more cases and awarding potentially larger amounts.” Increasing award amounts – especially by eliminating or raising the $5 million cap – would incentivize more whistleblowers to come forward and provide security for whistleblowers who face negative career and financial impacts.
We were also pleased to see the report’s acknowledgment of the value of knowledgeable and involved whistleblower counsel: “We see key benefits deriving from lawyers who understand the Program and who want to represent whistleblowers.” We applaud the Program for making supporting the Ontario whistleblower bar one of its stated goals – after all, we’re part of that bar!
Finally, the Program has not been shy about making clear what types of whistleblower tips they’re especially eager for: “greenwashing, improper tied selling, misuse of algorithms and artificial intelligence, and misconduct by public accounting firms that conduct audits of Ontario reporting issuers.” Beyond these current hot topics, the Program is seeking more tips on the evergreen subjects of “market manipulation and illegal insider training.” To date, the biggest category of tips received, comprising 28% of the tips, is “misleading corporate disclosure and/or financial statements.”
Constantine Cannon is happy to work with whistleblowers submitting tips through the OSC Whistleblower Program and to see the Program’s continued growth and success. If you’re considering blowing the whistle on a violation of Ontario securities law, please reach out to us. We have experience working with staff in both the OSC whistleblower office and enforcement branch teams and have trusted local law firm partners in Ontario. You can read more about the OSC Whistleblower program on our website.
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