TORONTO – The Ontario Securities Commission (OSC) today provided an update on its Whistleblower Program after five years in operation. The first and only paid program of its kind by a Canadian securities regulator has assisted OSC staff in identifying misconduct, advancing enforcement investigations, and holding companies and individuals accountable for wrongdoing.
Since its launch on July 14, 2016, the OSC Whistleblower Program has received approximately 650 tips from whistleblowers across Canada and over 15 foreign jurisdictions. To date, the OSC has awarded more than $8.6 million to whistleblowers. Enforcement actions involving whistleblower tips have resulted in monetary sanctions and voluntary payments of approximately $44 million.
“The OSC Whistleblower Program continues to exceed expectations and deliver tangible results,” said Grant Vingoe, Chair and CEO of the OSC. “I want to commend those who have come forward with information related to securities misconduct in Ontario. Their courage and determination enhance our ability to protect investors and achieve better enforcement outcomes for our markets.”
Individuals who received an award provided valuable information that led to enforcement action and a successful resolution. The tips were specific, credible and timely, on complex, novel and hard-to-detect matters. They offered first-hand and industry-specific knowledge, as well as detailed analysis to support evidence of wrongdoing, allowing the OSC to open new investigations and broaden the scope of existing investigations. Some individuals provided ongoing assistance to OSC Staff during their investigations, saving substantial time and resources.
“These individuals take tremendous personal and professional risks in coming forward, and the protection of whistleblowers is, therefore, a critical component of our program,” said Jeff Kehoe, Director of Enforcement at the OSC. “We expect employees to be free to voice their concerns about potential breaches of Ontario securities law, and will continue to take enforcement action against firms that retaliate against whistleblowers.”
In 2020, the OSC announced its first enforcement action related to a reprisal against an employee whistleblower.
For market participants in Ontario, the Whistleblower Program presents an opportunity to review and enhance internal compliance and reporting systems and foster a culture where internal reporting of misconduct is encouraged. While there is no requirement for employee whistleblowers to report internally, many have advised that they reported their concerns to their company before reporting to the OSC.
Additional highlights from the Whistleblower Program’s initial five years:
- The number of tips received has grown with each subsequent year as awareness of the program increases.
- Whistleblower tips included reports of potential misleading disclosure to investors, material misstatements in financial statements, illegal insider trading or tipping, market manipulation, abusive short selling, and reprisals against employee whistleblowers.
- Tips were received from individuals with specialized knowledge of misconduct. The whistleblowers were employees and company insiders as well as external analysts, industry professionals, and investors with unique knowledge about misconduct or the perpetrators of misconduct.
- Some whistleblowers reported anonymously through a lawyer.
- As a result of whistleblower tips, OSC staff identified persons and entities involved in misconduct in several industries, including financial services, natural resources, and technology.
- Awards are paid only after cases are concluded, and all rights to appeal have expired. Investigations and proceedings involving securities-related misconduct can be complex and may take several years to complete before an award can be made.
- The OSC values whistleblower tips and reviews each one carefully. In some cases, while not eligible for the OSC’s program, tips may result in a referral to another agency, for example, if a matter falls outside of the OSC’s jurisdiction.
- Robust whistleblower protections are built into the OSC’s Whistleblower Program. The details of each case are kept strictly confidential, and all reasonable efforts are made to ensure a whistleblower’s identity is protected.
The OSC intends to publish a detailed report early next year with more information about the program’s activities.
The OSC’s Whistleblower Program accepts tips on possible violations of Ontario securities law, offers protections for individuals who come forward, and provides compensation of up to $5 million for tips that lead to enforcement action. For more on the OSC’s Whistleblower Program, including award eligibility and how to submit a tip, visit: http://www.officeofthewhistleblower.ca.
Whistleblowers and lawyers with questions about the program may call the whistleblower hotline at 1-888-OSC-5553 (1-888-672-5553).
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair, efficient and competitive capital markets and confidence in the capital markets, to foster capital formation, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at http://www.osc.ca.