Risk Management and Crisis Response Blog

OSC’s Whistleblower Program has awarded over $9.33 million since 2016

Apr 12, 2023 4 MIN READ
Hannah Davis

Associate, Disputes, Toronto

Lawrence E. Ritchie

Partner, Disputes, Toronto

Sierra Farr

Associate, Disputes, Toronto


It has always been a challenge for capital market enforcers to muster sufficient information about potential market wrong-doing. This challenge has encouraged the proliferation of formal “whistleblower” protections and incentives within regulators’ enforcement toolbox. Some of these incentives are not without their critics, particularly in their use of “bounties,” as we discussed in this 2016 blog post. However, it is clear that these incentives have become an effective and important support to those enforcing capital markets rules and mandates.

On March 9, 2023, the Ontario Securities Commission (the OSC) released an update on its Whistleblower Program (the Program). The Program has been in place since 2016, and is the first and only paid program of its kind run by a Canadian securities regulator. We have previously written about the Program’s inception as well as the 2018 and 2020 Program updates. Pursuant to the Program, whistleblowers who submit original information about violations of Ontario securities law may be eligible for awards of up to $5 million.

OSC’s Whistleblower Program update

The OSC's latest update states that, since its inception, the Program has awarded over $9.33 million to 11 whistleblowers. As a result of information provided by whistleblowers through the Program, enforcement actions have been successfully brought against 19 respondents and $48 million in monetary sanctions and voluntary payments have been imposed. Awards may be issued pursuant to the Program in cases where an order has been made by the Capital Markets Tribunal, the order imposes total monetary sanctions or voluntary payments of over $1 million, and the appeal filing period has expired. Awards issued range between 5 and 15% of total monetary sanctions, to a maximum of $5 million.

The update also describes the consistent growth in the Program since 2016, noting a 17% average year-over-year increase in tips. Compared to the Program’s first fiscal year, there were 89% more tips in 2022. As of March 31, 2022, the Program had received 797 tips from more than 840 individual and joint whistleblowers, as well as 626 calls to the Program’s confidential hotline.

These tips covered a diverse range of securities misconduct. The majority of the tips related to misleading corporate disclosure and/or financial statements (28%) and fraud (21%), followed by illegal distribution and/or unregistered trading (15%) and registrant misconduct (14%). The OSC also received tips about illegal insider trading and/or tipping (9%) and market manipulation (4%), among other forms of misconduct.

Successful whistleblowers came from all corners of the world, including six continents and over 30 countries. Approximately 63% of tips originated from Ontario, 17% from the rest of Canada, and 15% from the combination of the U.S., Australia, the U.K. and China.

Whistleblowers were not always insiders. In fact, the majority of award recipients did not hold an internal role with the subject entities they reported about. Rather, they were familiar with the industry or the company, or had skills that enabled them to analyze information and draw insights.

Nonetheless, the Program contains protections from employer reprisal for those who report misconduct to the OSC, a self-regulatory organization, law enforcement or their employer. The employee does not need to be a whistleblower under the Program and the reprisal by the employer need only be threatened, not actually carried out, for there to be an offence. To further protect against reprisals, Ontario securities law may void terms of employee agreements, including confidentiality agreements, to prevent the silencing of employees.

Looking ahead

The update indicates an eagerness by the OSC to increase the Program’s effectiveness by building further awareness of the Program and tailoring outreach efforts to attract more tips relating to emerging and novel issues, including greenwashing, auditor misconduct, improper tied selling or misuse of algorithms and artificial intelligence. The OSC would also like to see more tips made through the Program related to market manipulation and illegal insider trading.

Further, the OSC plans to explore amendments to OSC Policy 15-601, Whistleblower Program, with the goal of enhancing the recognition of whistleblower contributions, such as by issuing awards in more cases and awarding larger amounts.

Key implications

It is essential for businesses to have strong controls and corporate culture in place to detect potential securities violations as early as possible. Businesses should implement systems that encourage internal reporting while also ensuring employee protection. Such systems would allow companies to investigate internally and remedy potential issues without the involvement of the OSC. This approach may allow companies to benefit from reduced sanctions or other options available under the OSC’s settlement regime and “credit for cooperation” regime. A robust approach to internal compliance can protect companies from the risk that they learn about serious misconduct within their organizations from the OSC.