Alberta securities watchdog ponders whistleblower program
The Alberta Securities Commission is considering adopting a whistleblower program to encourage tipsters who expose wrongdoing in the province’s capital markets.
But unlike programs operated by the Ontario Securities Commission and the U.S. Securities and Exchange Commission, the Alberta program would not pay for information leading to successful enforcement action.
“At this time, the ASC is not considering financial rewards as part of our whistleblower initiative,” Tara Meinhardt, senior communications adviser at the commission, said in an interview.
Instead, the ASC will focus on ways to assure confidentiality and protect whistleblowers from reprisals.
“In the experience of a jurisdiction like Quebec, which doesn’t offer payments, they have found that confidentiality and protection against reprisals (retaliation) are key to encouraging people to report wrongdoing with in their organizations,” Meinhardt said in an e-mail.
“As securities fraud and misconduct becomes ever more complex, crossing borders and incorporating new technologies to mislead investors and escape detection, it is imperative that we have access to the right information, expertise, processes and technology to detect ‘bad actors’ and analyze data and evidence,” the regulator said in the document, which laid out a plan to expand enforcement tools.
The whistleblower plan under consideration would be “designed to motivate individuals to report information about serious violations of Alberta securities law.”
The OSC, which launched a paid whistleblower program last July with many of the elements of the SEC program adopted after the 2008 financial crisis, determined that monetary rewards were necessary to provide an incentive to expose the kinds of wrongdoing that would be difficult if not impossible for regulators to find on their own.
Ontario’s program — which pays rewards of up to $5 million to individuals who come forward with tips that lead to enforcement action on violations of Ontario securities law such as insider trading, market manipulation, and accounting and disclosure violations — generated 30 tips within the first couple of months of operation.