On February 27, the Ontario Securities Commission (OSC) issued a $1.5 million whistleblower award to an individual whose disclosure “allowed the OSC to act swiftly to protect investors from harm.”
According to the OSC, the whistleblower “was an insider and submitted very specific and discrete non-public information to the OSC that broadened the scope of an existing investigation and contributed to the successful enforcement action.”
“The whistleblower had access to valuable information regarding early-stage misconduct that was critical to our ability to quickly respond and protect investors from further harm,” said Jeff Kehoe, Director of Enforcement at the OSC. “Internal whistleblowers can play a critical role in identifying harmful misconduct at an early stage that would be almost impossible to detect without their assistance. We will continue to build upon our successes to strengthen this enforcement tool.”
The OSC established its Whistleblower Program in 2016. Similar to the highly successful whistleblower program of the U.S. Securities and Exchange Commission (SEC), the OSC Whistleblower Program offers monetary awards to individuals who voluntarily provide the agency with original information that leads to a successful enforcement action. It was the first securities whistleblower award program in Canada.
Since it was established, the OSC Whistleblower Program has awarded more than $10 million to whistleblowers. In March 2023, the OSC reported that whistleblower disclosures have resulted in approximately $48 million in monetary sanctions. At that time, Kehoe referred to the program as “a resounding success.”
Like the SEC Whistleblower Program, the OSC Whistleblower Program offers anonymity and confidentiality protections. Whistleblowers are able to submit disclosures anonymously through a lawyer and the OSC remains committed to not disclosing any potentially identifying information about whistleblowers.
However, in contrast to the SEC, qualified OSC whistleblowers are entitled to awards of 5-15% of the sanctions collected in connection with their discourse (as opposed to 15-30% at the SEC) and awards are capped at $5 million (the SEC has no cap).
Given the transnational reach of the SEC Whistleblower Program, certain whistleblowers may still prefer to report securities violations to the SEC instead of or in addition to the OSC. According to the SEC, between 2011 and 2021, nearly 700 whistleblowers from within Canada reported through the SEC Whistleblower Program.