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Ontario Securities Commission proposes rewards for whistleblowers

by Greg Klein | February 3, 2015

Canada’s largest investment regulator wants to pay up to $1.5 million for information leading to sanctions against delinquent issuers. In a February 3 announcement, the Ontario Securities Commission said it hopes to gather “timely information that might otherwise be difficult, or even impossible, to obtain.”

Ontario Securities Commission proposes rewards for whistleblowers

OSC CEO Howard Wetston: Informants might
collect even if the commission doesn’t.

“We have proposed a realistic and concrete program that, in our view, needs to be put into action for the benefit of Ontario investors,” stated OSC CEO Howard Wetston. “We see a whistleblowing program as an important enforcement tool—one that will encourage individuals with high-quality information to come forward and report misconduct.”

The reward would reach up to 15%, capped at $1.5 million, of the total monetary sanctions imposed against a malefactor. To qualify, the info would have to bring about a minimum sanction or settlement above $1 million. But informants would get their loot even if the OSC didn’t. Under the proposal, rewards wouldn’t be contingent on recoveries.

An informant might qualify for a reward even if he or she held a degree of culpability.

OSC staff “would use all reasonable efforts” to hide an informant’s identity. The commission would also consider asking the province to legislate anti-retaliation provisions in Ontario’s Securities Act.

“The program would be the first of its kind for securities regulators in Canada,” the OSC added. But the commission considered the Canada Revenue Agency’s Offshore Tax Informant Program as well as whistleblower programs used by the U.S. Securities and Exchange Commission and the Australian Securities and Investments Commission.

The British Columbia Securities Commission has no similar program under consideration, communications officer Richard Gilhooley tells The BCSC does conduct a Be Fraud Aware campaign, which includes an app, and encourages people to report scams. “We also put out investor alerts periodically to inform the public about ongoing scams or trends that we want them to be concerned about or report to us about,” he adds.

The OSC seeks written public input until May 4. In addition, a roundtable discussion will be announced shortly.

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