Securities informants get $7.5M in awards

The Ontario Securities Commission has paid $7.5 million to whistleblowers in the inaugural use of a first-of-its-kind program in Canada that pays for tips leading to findings of wrongdoing under securities law.

The three recipients receiving the cash were not identified by the OSC, which pledges to take “all reasonable efforts” to protect the identity of whistleblowers.

“These individuals voluntarily provided high-quality, timely, specific and credible information, which helped advance enforcement actions resulting in monetary payments to the OSC,” the OSC Office of the Whistleblower said in a statement.

“These whistleblower awards are the first ever by a Canadian securities regulator.”

Maureen Jensen, chair of the regulator, said the program “has proven to be a game-changer for the OSC’S enforcement effort,” and praised those who provided “valuable information about harm to Ontario’s capital markets.”

The OSC’S program was launched in 2016 in hopes of matching the success of a similar program run by the U.S. Securities and Exchange Commission. Under the Canadian program, whistleblowers can receive compensation of up to $5 million for a tip that leads to enforcement action.

The SEC rewards tips that lead to sanctions of at least $1 million and — in a richer formula than the one used by the OSC — pays up to 30 per cent of money collected to the whistleblower.

The U.S. regulator paid a record-breaking award of $83-million to a trio of recipients last March. The SEC releases more details about whistleblower awards, such as aggregate sanctions the U.S. regulator has imposed on the wrongdoers.

Kristen Rose, the OSC’S manager of public affairs, said releasing specifics could compromise the Canadian watchdog ’s effort to protect the identity of those providing valuable information.

“In a capital market the size of Ontario’s, there is heightened risk that any details we provide could identify the whistleblowers,” she said.

Jordan A. Thomas, a partner at law firm Labaton Sucharow in New York who advises whistleblowers in the U.S., said providing additional details does not “on balance” add value to such programs.

“The more information the SEC (or) OSC provide to the public, the more risk that whistleblowers will face,” he said.