A trio of whistleblowers have received $7.5 million in payouts from the Ontario Securities Commission (OSC)—the first set of awards announced by Canada’s largest regulator, which operates the country’s only program that pays for enforcement tips.
The OSC said Wednesday that it paid out a total of $7.5 million to three whistleblowers in three different enforcement cases. The OSC’s whistleblower program, adopted in 2016, is modelled on a program launched by the U.S. Securities and Exchange Commission (SEC) in 2011 to help root out misconduct by offering financial rewards for high-quality enforcement tips.
Regulators don’t provide details on whistleblower cases in order to protect the anonymity of the tipsters. In its announcement, the OSC said that the recipients of its first-ever awards “voluntarily provided high quality, timely, specific and credible information, which helped advance enforcement actions resulting in monetary payments to the OSC.”
Under the OSC’s program, whistleblowers are eligible for financial payouts in cases that result in monetary sanctions of at least $1 million, with payouts ranging from 5% to 15% of the sanctions total. Whistleblower awards are capped at $5 million and can only be paid after all appeals on an enforcement order have been exhausted, which is why payouts under the program can take years to materialize.
“Our whistleblower program has proven to be a game-changer for the OSC’s enforcement efforts,” said Maureen Jensen, chair and CEO of the OSC, in a statement.
“This would not be possible without courageous individuals willing to come forward and provide valuable information about harm to Ontario’s capital markets,” she added.
Since the OSC launched its whistleblower program, a couple of other Canadian regulators have set up their own processes to encourage enforcement tips—but these programs do not offer financial rewards.
Conversely, in the U.S., the SEC has now paid out out more than US$326 million to 59 individuals since making its first award in 2012. In turn, these cases involving whistleblowers have generated US$1.7 billion in regulatory enforcement sanctions for the SEC.
“Whistleblowers expose complex securities misconduct that may not otherwise come to light, allowing us to take timely action,” said Jeff Kehoe, director of enforcement at the OSC, in a statement. “We hope this announcement, alongside our substantive whistleblower protections, will encourage more whistleblowers to come forward.”