Canada’s Securities Commission Adopts U.S. Whistleblower Reward Framework

The Ontario Securities Commission (OSC), Canada’s regulatory agency for securities, has backed proposed legislation that draws directly from the U.S. whistleblower reward program. On June 9, 2015, the CBC, Canada’s national public broadcaster, reported that the OSC, which is similar to the U.S. Securities and Exchange Commission, held a roundtable to discuss proposals to protect and reward corporate whistleblowers.

OSC commissioner Mary Condon specifically stated that the proposed legislation takes from the “apparent successes” of the U.S. whistleblower reward program. Since the U.S. whistleblower reward program was enacted, the number of investigations and findings of corporate wrongdoing increased significantly. As a result, the U.S. recovered hundreds of millions of dollars in taxpayer money, and whistleblowers received rewards as high as tens of millions of dollars.

While the OSC views the U.S. program as a success, it is concerned that the prospect of significant rewards may create an incentive for corporate employees to postpone reporting illegal activity in the hope of cashing in on a higher reward. To combat this potential problem, the OSC plans to cap the whistleblower reward at $1,500,000 per whistleblower. It is uncertain whether whistleblowers who themselves engaged in illegal activities will be entitled to any reward under the proposed legislation.

There has been debate within the U.S. over the success of its whistleblower program, but other countries and jurisdictions view the U.S. program as a success. By adopting this proposed legislation, Canada’s OSC has endorsed the most frequently criticized aspect of the U.S. whistleblower statute – the rewards provision.

Tagged: Whistleblower Laws (Federal)