Skip to main content

Credit: iStockphoto

unknown/iStockphoto

At first blush, it feels somehow unseemly to pay people for providing the authorities with information about a crime. Why can't people do the right thing of their own volition?

In many instances, they can. But white-collar crime in the securities realm may not be one of those instances. Offences such as accounting fraud or insider trading are hard to discover unless insiders are willing to bring issues to light – yet doing so presents huge risks for whistleblowers. Many have faced discipline and dismissal. And even if they escape that fate, their evidence risks damaging their own financial interests: They will likely end up harming and even putting out of business the company that pays their salary. It's only logical that many people weigh the risks (enormous) versus the rewards (none) and decide to turn a blind eye.

In 2011, the U.S. Securities and Exchange Commission decided to see whether they could change those attitudes by paying cash for tips that lead to successful prosecutions. The program has succeeded beyond all expectations, with 3,600 tips pouring in last year alone. Many of them are coming from citizens of other countries – including 58 from Canadians last year – who prefer to bring forward allegations of wrongdoing in a jurisdiction where they may be paid for the information. The Globe and Mail reported Wednesday that SEC officials began investigating Toronto-based advertising company MDC Partners Inc. on the basis of a whistleblower tip.

Story continues below advertisement

The Ontario Securities Commission is now considering a similar program, motivated by the success of the U.S. strategy. The proposal is facing criticism, with some saying it could encourage false reports. But with payouts only possible for successful prosecutions, there is nothing to be gained from crying wolf.

The OSC's bigger challenge will be deciding whether to provide payments to people involved in wrongdoing. It's a line that must be drawn carefully, but balance is possible. The OSC needs strong tools to discover and investigate crimes, and payments for information can be justified if they lead to more successful prosecutions.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter