In the two years since its launch, the whistle-blower program aimed at combating white- collar crime in Ontario has generated roughly 200 tips, the provincial securities watchdog says.
Out of those tips, 45 are currently under review, 19 have been referred to enforcement and 15 are associated with active investigations, the Ontario Securities Commission said Friday.
“The program is still in its infancy, but is already proving to be a powerful enforcement tool,” Jeff Kehoe, the OSC’s director of enforcement, said in a statement.
The OSC became the first provincial securities regulator in Canada to introduce a program that provides whistle-blowers with the opportunity to get paid for tips about possible violations of Ontario securities law such as insider trading, market manipulation and accounting fraud.
The program offers protections for those who come forward and offers a reward of up to $5-million for tips that lead to enforcement action.
Quebec’s Autorité des marchés financiers also introduced a whistle-blower program in 2016, but it does not provide any monetary rewards for tipsters.
The OSC’s whistle-blower program was modelled partly on that of the U.S. Securities and Exchange Commission, although the cash rewards offered by the U.S. regulator may be much higher.
Whistle-blowers who provide the SEC with information that leads to sanctions above US$1-million can receive 10 per cent to 30 per cent of the money collected. Earlier this year, the regulator awarded a record US$83-million to three tipsters who helped the SEC reach a settlement with Bank of America Corp’s Merrill Lynch brokerage unit.
The OSC had originally planned to cap reward payments at a maximum of $1.5-million. However, it raised that limit after experts suggested, during consultations, that the amount was too low to compensate senior executives who put their high-paying jobs at risk by becoming whistle-blowers.
With a file from Reuters