One of Canada’s most important financial watchdog bodies will launch a new program next month in order to incentivize whistleblowing by paying up to US$5 million for insider information about accounting fraud, insider trading and market manipulation.
In a bid to help curb corporate crime, the Ontario Securities Commission (OSC) has appointed Kelly Gorman to lead the new program, which will provide important legal protections to whistleblowers such confidentiality and anti-retaliation measures.
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"The OSC's Office of the Whistleblower will be the first paid whistleblower program by a securities regulator in Canada and will be headed by Kelly Gorman, an OSC executive with significant experience in securities law enforcement," said Maureen Jensen, Chair and CEO of the OSC.
The OSC's Office of the Whistleblower will be the first of its kind for securities regulators in Canada and is expected to increase the effectiveness of the OSC's enforcement efforts by providing access to high quality information about financial misconduct.
People who provide information can obtain a maximum of US$1.5 million even if the penalties are not paid by the accused, and the compensation can increase to a maximum of US$5 million in cases where the OSC receives more than US$10 million in penalties.
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Canada’s new initiative resembles programs in other financial regulatory bodies that have been relying on whistleblowers extensively in their effort to curb illicit behavior.
The U.S. Securities and Exchange Commission (SEC) Whistleblower Program, which is now entering its sixth year, recently awarded more than US$17 million to a whistleblower, the second-highest sum ever offered.
The OSC first examined the possibility of introducing a paid whistleblower program in 2010, after the launch of the incentive-backed program introduced by the SEC in the aftermath of the financial crisis of 2008.