Tuesday 6th December 2016

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Posts tagged ‘l’Autorité des marchés financiers’

SEC pays whistleblower $22 million for securities fraud tip

August 30th, 2016

by Greg Klein | August 30, 2016

Detailed information and extensive assistance brought an informer more than $22 million, the U.S. Securities and Exchange Commission announced August 30. It’s the SEC’s second-highest award, following a $30-million payout in 2014.

The anonymous tipster worked for the offending firm, which wasn’t named by the SEC.

SEC pays whistleblower $22 million for securities fraud tip

“Company employees are in unique positions behind the scenes to unravel complex or deeply buried wrongdoing,” said Jane Norberg, acting chief of the SEC’s Office of the Whistleblower. “Without this whistleblower’s courage, information and assistance, it would have been extremely difficult for law enforcement to discover this securities fraud on its own.”

In June 2015, Norberg told an Ontario Securities Commission roundtable that the SEC had paid 17 people a total of more than $50 million over four years of operation. The largest reward at that time was over $30 million. The total now surpasses $107 million, divvied up between 33 recipients.

Rewards can range between 10% and 30% of money collected when sanctions exceed $1 million, the SEC stated. “No money has been taken or withheld from harmed investors to pay whistleblower awards.” The SEC protects tipsters’ confidentiality.

Last month the OSC became Canada’s first regulator to offer such rewards. Payouts can range from 5% to 15% of sanctions and/or voluntary payments by companies of at least $1 million. The maximum reward comes to $1.5 million, but can increase to $5 million should the penalty exceed $10 million.

An e-mail from OSC rep Kate Ballotta confirms that the program has already received tips but doesn’t state whether payouts have been made yet. “Another securities enforcement tool unique to the OSC,” she writes, is the no-contest settlement program in which five cases have resulted in about $200 million being returned to investors.

In Quebec, l’Autorité des marchés financiers launched a reward-less whistleblower program in June, after AMF research found “confidentiality is what primarily motivates whistleblowers to report incidents.”

The Prospectors and Developers Association of Canada opposed the OSC rewards, arguing they could encourage “bounty-hunting behaviour and framing companies for financial gains.” PDAC also warned that “overly cautious issuers” might face extra costs for additional legal advice.

L’Autorité des marchés financiers disagrees with the Ontario Securities Commission policy of rewarding whistleblowers

August 5th, 2016

…Read more

Ontario Securities Commission offers whistleblowers cash for tips

July 14th, 2016

by Greg Klein | July 14, 2016

There’s nothing like altruism, especially when there’s something in it for you. The Ontario Securities Commission became Canada’s first such regulator to open a paid whistleblower program on July 14. The new office wants to hear about possible violations that include illegal insider trading, market manipulation, accounting transgressions and disclosure contraventions. Informers with info leading to OSC sanctions and/or voluntary payments of at least $1 million qualify for rewards ranging from 5% to 15%, capped at $1.5 million. But should the OSC collect over $10 million, the cap rises to $5 million.

Ontario Securities Commission offers whistleblowers cash for tips

The size of the reward depends on the amount collected, a departure from the OSC’s original proposal to pay out even if the malefactor doesn’t.

Those involved in wrongdoing might qualify for a reward, although the degree of culpability can decrease the payout.

Whistleblowers may report anonymously if they have a lawyer act as go-between. The OSC says it “will make all reasonable efforts” to protect their sources. Anti-reprisal provisions apply, even if the info doesn’t bring about enforcement or doesn’t meet the reward criteria. Conditions require that the info isn’t already known to the OSC, was provided voluntarily and didn’t originate from a third party.

Interestingly, there’s no whistleblower reward for info relating to criminal or quasi-criminal cases.

The program’s “a game-changer for securities enforcement in Canada,” said OSC CEO/chairperson Maureen Jensen. The commission studied the Canada Revenue Agency’s Offshore Tax Informant Program and programs implemented by the U.S. Securities and Exchange Commission and the Australian Securities and Investments Commission.

But the latter agency doesn’t offer rewards, the Prospectors and Developers Association of Canada pointed out. Nor does a program run by the U.K. Financial Conduct Authority.

In its submission to the OSC last year, PDAC suggested cash rewards could encourage “bounty hunting behaviour and framing companies for financial gains.” The organization feared companies could face higher compliance costs for additional legal advice.

“Reporting of fraud should be a moral obligation … not driven by financial incentives,” PDAC added.

Nor will payouts come from Quebec’s whistleblower program, launched last month. L’Autorité des marchés financiers found “it cannot be established with certainty, based on specific data, that a financial incentive generates more quality whistleblowing.

“Instead, the AMF’s research and analysis highlight that the protection of confidentiality is what primarily motivates whistleblowers to report incidents.”

Week in review

March 8th, 2013

A mining and exploration retrospect for March 2 to 8, 2013

by Greg Klein

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A city built on gold—and smuggling

“I didn’t ‘out’ anyone in the book and it wasn’t my intention to do that,” said Timmins journalist Kevin Vincent. “If I outed one prominent businessperson, I would have to out everyone in Timmins.” Discussing his book Bootleg Gold in Tuesday’s Northern Ontario Business, Vincent recounted what was once the mining town’s second-largest industry.

A mining and exploration retrospect

“A large percentage of the prominent business community has its roots tied to the gold-smuggling industry,” he told the paper. “In the 1920s, ’30s and ’40s, there was so much gold here every business had to have a set of scales under the counter. If you didn’t, you weren’t in business.”

Highgrading, as it was called, started with miners stealing small amounts, which they sold on a well-organized black market for 50%. “Shift bosses, mine captains and even mine managers were also involved,” Northern Ontario Business stated.

“When the gold was all put together, it was really compiled by just a handful of individuals and they controlled everything,” the paper quoted Vincent. “If you tried to move significant amounts of gold outside of their operation you ran a real, serious risk. Everyone knew it was going on and there were rules of engagement you had to follow.”

The endeavour was pervasive, with spinoff opportunities for seemingly everyone. One way of sneaking loot out of the mine was “inside false teeth constructed by local dentists,” the paper reported.

Due diligence defends against dirty deeds

March has been proclaimed Fraud Prevention Month by Canada’s 13 securities commissions. The regulators have a number of public awareness programs underway, including a provincial tour by the Ontario Securities Commission which highlights the agency’s new Office of the Investor, “the voice of the investor internally at the OSC.” On Tuesday some agencies, including Quebec’s l’Autorité des marchés financiers, cautioned would-be investors to check the registration (here and here) “of any firm or individual selling securities or offering investment advice.”

The following day the British Columbia Securities Commission announced two new features to its Investright program—a guide to private placements for retail investors and a mobile app providing investment advice and up-to-the-minute scam alerts. Like its Ontario counterpart, the BCSC has its own roadshow, this one exposing the province’s top 10 scams.

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