In Canada, the Ontario Securities Commission (OSC) recently launched its whistleblower reward program, a first for Canadian securities regulators. Under the program, whistleblowers whose tips lead to successful enforcement actions may be eligible for a financial reward of up to $5 million (approximately $3.88 million in USD).
The Ontario program is largely modeled on the hugely successful U.S. Securities and Exchange Commission’s whistleblower program. Like the SEC program, the OSC offers whistleblowers anonymity, protection from employer retaliation and a financial incentive.
“Our whistleblower program is a powerful addition to our enforcement arsenal and a game-changer for securities enforcement in Canada,” said Maureen Jensen, Chair and CEO of the OSC in a statement. “The program will enhance our ability to protect investors and achieve better outcomes for our markets by helping us identify and pursue violations of securities law that may only come to light through a whistleblower.”
Across the Atlantic, Germany’s Federal Financial Supervisory Authority (BaFin) announced earlier this month it created a platform that allows whistleblowers to report tips of financial fraud anonymously. In its announcement, BaFin noted that whistleblowers “can make a valuable contribution towards uncovering misconduct by individual persons or entire companies within the financial sector as well as stemming or correcting the negative consequences of such misconduct.”
Unlike the SEC and OSC programs, however, BaFin does not provide whistleblowers a financial incentive.
This is unfortunate because the track record of whistleblower programs in the US demonstrates that financial rewards have been critical to attract quality tips and recover money for investors and taxpayers.
“Whistleblower programs that are structured to offer job protection, confidentiality and rewards have proven to be a very successful approach in the US to attracting high-quality whistleblowers in the financial sector,” Erika Kelton, a whistleblower lawyer and partner at Phillips & Cohen LLP, told InsideCounsel.
Over the last five years, the SEC has collected more than $453 million as a result of whistleblower reports from the US and other countries and has awarded more than $85 million to 32 whistleblowers. The largest SEC whistleblower award so far, $32 million, went to an international whistleblower represented by Phillips & Cohen.