Ontario Securities Commission awards over half a million dollars to three whistleblowers
Following a trend of rising whistleblower tips and awards, the Ontario Securities Commission (the “OSC”) recently sent another strong signal to whistleblowers that “timely, specific and credible” tips can yield considerable financial rewards. In its November 17, 2020 announcement, the OSC emphasized that the three whistleblowers, who were awarded a total of $585,000, included company outsiders who provided OSC Enforcement Staff “with specialized technical analysis on a complex area of securities law.”
While the details of the specific tips and tipsters remain confidential, the OSC indicated that the information provided by the whistleblowers ultimately led to both the opening of a new investigation and the broadening of an existing one. It was reported that each whistleblower engaged in extensive collaboration with the OSC, including by providing ongoing evidence and contributions to advance the investigations as needed.
The announcement of this recent trio whistleblower award is consistent with the OSC’s push in the last year to promote and increase its use of its Whistleblower Program, which was launched in 2016 but did not begin issuing awards until early 2019. The Program accepts tips on possible violations of Ontario securities law, offers protections for individuals who come forward, and awards compensation of up to $5 million for tips that ultimately lead to successful enforcement action.
In a joint press release issued [PDF] on October 1, 2020, the OSC and the Investment Industry Regulatory Organization of Canada (“IIROC”) urged those with helpful tips to come forward. Specifically highlighting the dangers of abusive short selling and illegal insider trading, the regulators encouraged whistleblowers with valuable information about securities violations to report tips through the OSC’s Whistleblower Program.
According to the OSC, its Whistleblower Program has awarded more than $8.6 million to whistleblowers to date. The recent award demonstrates the OSC’s seriousness about this initiative and suggests that we may see an increasing uptake in whistleblowing in months to come, particularly in the work from home environment.
In the United States, the Securities and Exchange Commission (the “SEC”) has recently reported payments of more than $721 million to 114 individuals since issuing its first award in 2012. See here for our previous blog post discussing recent amendments to the SEC’s Whistleblower Program, and here and here for our previous blog posts comparing and contrasting the SEC’s Program with that of the OSC.