OSC Whistleblower Program contributing to a stronger culture of compliance

TORONTO – Marking two years since the launch of its Whistleblower Program, the Ontario Securities Commission (OSC) today released an update on the progress of the program, the first of its kind by a Canadian securities regulator. The program accepts tips on possible violations of Ontario securities law, offers protections for individuals who come forward, as well as compensation of up to $5 million for tips that lead to enforcement action.

“The Whistleblower Program has been very effective in generating tips and shining a light on information that previously would have remained in the shadows,” said Maureen Jensen, Chair and CEO of the OSC. “We are pleased that people know about the Whistleblower Program, that it is being used, and that it has become an important tool for protecting investors.”

Some highlights from the OSC Whistleblower Program:

• The program was launched in July 2016 and, as of the end of June 2018, has generated approximately 200 tips, an average of about two per week.
• Timely, specific and credible tips about securities-related misconduct can be submitted by one or more individuals, and can be submitted anonymously through counsel. The OSC makes all reasonable efforts to protect whistleblowers’ identities.
• All tips undergo a review process to determine the appropriate course of action. Currently, 22 percent of the total number of tips received (45) are under review.
• Ten per cent of tips (19) warranting further action by the OSC were referred to Enforcement, of which 15 (or 7 per cent) are associated with active investigations. Thirty-five per cent of tips (68) were or are in the process of being shared with another OSC operating branch or another regulator for further action.
• Awards are paid after cases are concluded and all rights to appeal have expired. Investigations and proceedings involving securities-related misconduct can be complex, and may take several years to complete before an award can be made.
• The OSC values whistleblower tips and reviews each one carefully. In some cases, tips may not be actionable, for example, because matters fall outside of the OSC’s jurisdiction.

“The program is still in its infancy, but is already proving to be a powerful enforcement tool, as with our no-contest settlements and the option to self report,” said Jeff Kehoe, Director of Enforcement at the OSC. “These all serve to promote a strong culture of compliance in Ontario’s business community, effectively extending our reach and allowing us to do more to protect investors.”

Under specific circumstances, the OSC offers market participants the opportunity to efficiently address compliance issues that they discover and self-report via a no-contest settlement. The use of no-contest settlements has helped recover significant amounts for investors and resolve cases more quickly and efficiently. To date, the OSC has approved 11 no-contest settlements, resulting in over $368 million in compensation to investors.

The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair and efficient capital markets and confidence in the capital markets, and to contribute to the stability of the financial system and the reduction of systemic risk.  Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at www.osc.ca.

Tips may be submitted through the Office of the Whistleblower website at www.officeofthewhistleblower.ca.

 

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