In a recent decision, a whistleblower (a former
investment firm employee) had tipped the agency with detailed
descriptions of alleged misconduct and the identities of
individuals involved following his or her departure from the
company. The SEC was successful in its enforcement action against
the firm. The whistleblower was paid an award of $325,000. However,
the SEC stated in its press release that the award could have been
higher had the individual come forward earlier:
Corporate insiders who become aware of securities law violations
are encouraged to come forward without delay in order to prevent
misconduct from continuing unabated while investors suffer more
The decision and release stress the significant incentives and
protections afforded to whistleblowers, and are a further indicator
of the importance the SEC places on the bounty programs in
identifying and prosecuting corporate malfeasance.
In another decision released this week, a bounty
of over $2.3 million was awarded to a former employee of NetCracker
Technology Corp. after he filed a suit under the U.S.'s False
Claims Act against NetCracker and Computer Sciences Corp. The
whistleblower provisions of the False Claims Act permit private
parties to file suit on behalf of the United States for false
claims and obtain a portion of the government's recovery.
As Risk and Crisis Management
has recently discussed, the Ontario Securities Commission is
currently in the process of implementing a bounty system, offering
a "whistleblower reward" to individuals who report and
submit to the OSC information on serious securities or derivatives
related misconduct. In the U.S., the SEC's whistleblower
program has paid more than $54 million to 22 whistleblowers since
its inception in 2011. Companies listed on major US exchanges,
including Canadian corporations, are required to maintain a
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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