B.C. Securities Commission program offers monetary awards for whistleblowing
The British Columbia Securities Commission (BCSC) has introduced a new Whistleblower Program to incentivize future whistleblowers to come forward by offering monetary rewards. As of November 7, 2023, those who provide the BCSC with helpful information regarding investment fraud or “other serious types of market misconduct” could see payouts ranging from $1,000 to $500,000.
This new program comes in the wake of several other whistleblower programs being introduced across the country. The Ontario Securities Commission (OSC) was the first to introduce the OSC Whistleblower Program in 2016, modelled after its American counterpart. Since its inception, the OSC’s program has successfully obtained “high quality tips which have resulted in timely and impactful enforcement action” and it has paid out over $9 million to 11 whistleblowers. The maximum award under the OSC Whistleblower Program is $5 million.
The provinces of Québec and Alberta followed suit, introducing whistleblower programs of their own. However, neither program offers monetary awards.
Like the other programs that offer cash awards, there are parameters around who can receive awards and under what circumstances. For instance, if a whistleblower provides information that is false, misleading, illegally obtained, or concerns only their own wrongdoing, they will not be eligible for a monetary award. As well, whistleblowers are assured anonymity during the reporting stage, but they cannot receive a monetary award until they reveal their identity to the BCSC. The BCSC firmly states that they do not provide any “guarantee or assurance of confidential informer privilege.”
The amount a whistleblower will receive is determined by the BCSC executive director and depends on relevant factors such as, among other things:
- How quickly the information is reported.
- How clear, accurate, organized and complete the information is.
- The whistleblower’s level of cooperation with the BCSC, and
- How much the information contributes to an important result.
As the BCSC’s Chair and CEO Brenda Leong states in a news release: “The more valuable your information is, the more we may pay you”, up to the limits under the program.
By providing for awards but limiting them to a maximum of $500,000 (and even then, only if the information contributes to multiple occurrences of different results), the BCSC appears to have landed somewhere in the middle of this spectrum. Arguments in favour of monetary payouts emphasize the importance of compensating whistleblowers for actions that could end their careers. Arguments against them say that keeping a whistleblower’s identity confidential is sufficient, and that moral motivations should trump financial ones. Some also argue, as we have written previously, that these external programs dissuade whistleblowers from reporting internally using an employer’s whistleblowing policy.
The new B.C. Whistleblower Program follows amendments to the Securities Act meant to protect employees from reprisals, like termination, for certain forms of whistleblowing, which came into force on March 27, 2020 (see s. 168.04). The BCSC’s new program adds monetary incentives into the mix. It remains to be seen whether the introduction of monetary awards will result in an increase in high-quality tips and greater protections for investors from improper or fraudulent activity.