On July 14th, 2016, the Ontario Securities Commission (“OSC”) introduced OSC Policy 15-601, the Whistleblower Program (“Program”) which is designed to encourage individuals to report information on serious securities or derivatives related misconduct to the OSC, or where appropriate in the circumstances, through an internal compliance and reporting mechanism.
Under the Program, individuals who meet certain eligibility criteria and who voluntarily submit information to OSC staff regarding a breach of Ontario securities laws may be eligible for a monetary reward of up to $5 million if it is determined that the information submitted was of meaningful assistance to the OSC staff in investigating the matter and in obtaining a decision of the OSC that results in an order imposing monetary sanctions and/ or making of a voluntary payment of $1 million or more.
Whistleblowers are required to file a declaration stating among other things that they understand that it is an offence to make a statement to the OSC that is misleading or untrue or does not state a fact that is required to be stated to make the statement not misleading. The whistleblower may be prosecuted for providing misleading or untrue information to the OSC. The form may be submitted online or sent by mail.
In certain circumstances, the whistleblower may submit the information anonymously if the whistleblower is represented by a lawyer. In this instance, the lawyer will complete whistleblower submission form and will sign the declaration on behalf of the whistleblower. However, before any monetary award can be made, the whistleblower will be generally be required to reveal their name. In addition, the OSC cannot guarantee anonymity if there is a request made under the Freedom of Information and Personal Protection and privacy act (Ontario). The policy states that the OSC expects that employers will not retaliate against the whistleblower; however, the OSC does not currently have the statutory ability to enforce these provisions of the policy.
In order to qualify for an award, the information submitted must be original, gathered from the whistleblower’s independent knowledge derived from his or her experiences, communications and observations or the whistleblower’s critical analysis of publicly available information. The following types of information are excluded from the accepted information:
- Subject to solicitor-client privilege;
- Obtained in connection with the provision of legal advice to a client or employer on whose behalf the whistleblower or his /her firm acts or provides services;
- Obtained from an allegation made in a judicial administrative hearing or enforcement matter of a securities-related self-regulatory organization, a government report, hearing; and, audit or investigation or news media (unless the whistleblower is the only source) or a violation of applicable criminal law.
Even after the whistleblower has made the original submission, the Policy allows the OSC to request additional information and assistance from the whistleblower, including:
- Guidance and explanations, so that the OSC may evaluate and use the information provided;
- A description and precise location of, any documents that support the whistleblower’s submission that the whistleblower has knowledge of, but not possession;
- Any additional information in the whistleblower’s possession;
- Testimony at any OSC proceedings; and,
- Information relating to whether the whistleblower is entitled to a whistleblower award.
In general, the information submitted will only be eligible if it relates to a serious violation of Ontario securities laws. It should be of a high quality and provide meaningful assistance to the OSC in investigating the matter and relating to the outcome. Additionally, the information must relate to a violation that is not currently being investigated or which significantly broadens the scope of an existing investigation.
Whistleblowers are required to maintain as confidential any information provided to them by a Commission staff member and any information they may have become aware of during their course of their participation in the investigation.
OSC Policy 15-601 is available for download from the Ontario Securities Commission’s website.
For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004.
This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.