Alberta Securities Commission implements whistleblower program
On November 20, 2018, the Alberta Securities Commission (ASC) announced the creation of its whistleblower program and the Office of the Whistleblower (OWB). The program is implemented through the adoption ASC Policy 15-602 Whistleblower Program and accompanying amendments to the Securities Act (Alberta) (the Act).
The whistleblower program encourages “whistleblowers” (which can include employees, contractors or directors of an organization) to report potential breaches of Alberta securities laws by their employer to the ASC on a voluntary basis. The program is specifically designed to encourage compliance with securities laws and to help identify misconduct as soon as possible, so that the ASC can intervene, investigate and minimize harm to investors.
Key features of the ASC’s new whistleblower program are as follows:
- New reporting mechanisms and processes: The whistleblower program introduces a number of mechanisms that are intended to make the reporting process easier. For instance, a whistleblower can report a tip either by preparing a standard form (available on the ASC’s website) and submitting it to the OWB or by calling a toll-free number. The OWB reviews all tips that are received, although not all tips will result in investigations or other action.
- Heightened confidentiality protections: New provisions in the Act mandate that a whistleblower’s identity is confidential and can only be disclosed in limited circumstances. For instance, a whistleblower’s identity cannot be compelled from the ASC under the Freedom of Information and Protection of Privacy Act (Alberta). Similarly, ASC staff cannot disclose a whistleblower’s identity, or information that could be reasonably expected to reveal a whistleblower’s identity, to other regulatory or law enforcement authorities without the consent of the whistleblower and the Executive Director. Finally, it is possible for a whistleblower to make a tip anonymously.
- Protection from reprisal: Section 57.4 of the Act prohibits reprisals against an employee in response to actual or anticipated whistleblowing activity by the employee or a relative, or in response to co-operating, testifying or otherwise assisting in ASC investigations or proceedings. This protection is further strengthened by the ASC’s ability to take enforcement action in the event a reprisal occurs; indeed, the ASC has the power to investigate potential reprisals and take appropriate proceedings against employers or colleagues who commit or direct a reprisal against a whistleblower who submitted a tip in good faith. The Act also creates a statutory right for a whistleblower to claim certain damages for a reprisal. Investigative information from the ASC, including information from the OWB, will generally not be available to the parties in any such legal action.
- Anti-whistleblowing provisions unenforceable: Section 57.5 of the Act renders unenforceable any contractual provisions and policies that attempt to prohibit an employee from acting as a whistleblower, seeking or providing advice about acting as a whistleblower, or assisting in investigations or proceedings of the ASC. Similarly, section 57.6 of the Act prohibits an employer from obstructing an employee from doing any of the following: acting as a whistleblower; seeking or providing advice about acting as a whistleblower; or assisting in investigations or proceedings of the ASC.
- No financial incentives: Unlike in Ontario, the ASC’s whistleblower program does not provide any financial incentives or compensation to whistleblowers who provide tips that lead to investigations or other enforcement action. We recently provided an update on the OSC’s whistleblower program after its first two years in place.
The ASC’s whistleblower program implements significant protections for whistleblowers. However, it remains to be seen whether the new program will be effective in encouraging employees to come forward with tips on securities-related misconduct by their employer, particularly in the absence of strong financial incentives to do so.