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OSC whistleblower program awards $525,000 to independent expert

by Greg Klein | April 6, 2020

A program that encourages and protects in-house informers can also pay off handsomely to outsiders. The Ontario Securities Commission has awarded $525,000 to someone who used industry expertise, as opposed to inside intel, “to identify irregularities.”

OSC whistleblower program awards $525,000 to independent expert

The commission’s whistleblower program offers up to $5 million for tips on insider trading, fraud, misleading statements and other violations of Ontario securities law. The OSC keeps confidential the whistleblower’s identity, as well as that of the wrongdoer, the amount of “irregularities” and the penalty.

But the penalties or repayments must be high. The minimum amount to qualify for reward is $1 million. Payouts range from 5% to 15% of those amounts.

Sources come in two categories—knowledge derived from “experiences, communications and observations in employment, business or social interactions” or analysis “of publicly available information or data that reveals additional insight that is not generally known or available to the public,” the OSC states.

“Experts can be among the first to spot signs of potential misconduct in our markets,” said Jeff Kehoe, OSC director of enforcement. “These subtle clues are often buried deep in reams of data and technical information decipherable only by someone with in-depth market knowledge or industry-specific expertise.”

Launched in July 2016 as the first of its kind in Canada, the OSC’s program has so far given whistleblowers more than $8 million. As of February 2019, a total of $7.5 million went to just three informants.

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