Whistleblower protections and significant bounties paid to
whistleblowers in the U.S. continue to make headlines, just as
issuers in Canada brace for the impact of the OSC's rollout of
its whistleblower program in the coming weeks. Stateside, the SEC
announced yet another major award, this time in the amount of
$5-million. That announcement followed on the heels of a separate
whistleblower-related development at the American securities
regulator, as the SEC said that it would award another
whistleblower $3.5-million – a reversal of its earlier
decision to deny an award to that same whistleblower. Meanwhile, in
Ontario, Transparency International Canada (TI Canada) held its
annual Day of Dialogue last week, at which whistleblowing issues
were a focus. The Day of Dialogue was well-timed given TI
Canada's recent successful intervention at the Supreme Court of
Canada in the World Bank Group v. Wallace case, in which
TI Canada advocated for whistleblower protections.
Two Major SEC Awards
The recently-announced SEC whistleblower awards in the amount of
$5-million and $3.5-million are among the largest awards that
the regulator has handed out since it first adopted its
bounty-based program in 2011. Over the last five years, the SEC has
awarded more than $62-million to 28 whistleblowers, including
individual awards totaling $30-million and $14-million.
The announcement of the $3.5-million payout was particularly
notable given that the SEC initially denied making an award to this
whistleblower earlier this year because the information that the
whistleblower provided related to an SEC investigation that was
already underway. However, the whistleblower took advantage of the
appeal provisions built into the SEC program and challenged the
regulator's initial decision. The SEC reconsidered its original
decision, stating: "After careful consideration of the
administrative record, including Claimant's written response
and the additional factual information provided by Enforcement
staff, we find that Claimant's information led to successful
enforcement because it significantly contributed to the success of
the Covered Action."
Notably, a version of the OSC's proposed whistleblower
program, which had been subject to comment until January 12, 2015,
specifically excluded the possibility of reconsideration or appeal.
The exclusion of appeal rights in the Ontario policy is noteworthy
given that many other aspects of the OSC proposal closely resemble
those of the SEC program.
TI Canada held its annual Day of Dialogue on May 10, 2016, with
a heavy focus on whistleblower-related issues. TI Canada is a
non-governmental organization that promotes anti-corruption
practices and transparency in Canada's governments, businesses
and society at large.
During its Day of Dialogue, TI Canada held a session titled
"From Outcasts to Bounty Hunters: The Evolving State of
Whistleblower Protection in Canada", with a panel including a
representative from the Ontario Securities Commission to discuss
the new whistleblower program that is expected to be implemented
shortly. The proposed OSC program has attracted and should continue
to attract significant interest from Canadian issuers and their
directors, legal counsel and compliance officers, given the
newly-created risk that employees may be incentivized under the
program (once it is in force) to take allegations of wrongdoing at
a company directly to the OSC, without first advising internal
The developments in Ontario come as the Supreme Court of Canada
recently issued its decision in the World Bank Group v. Wallace case, in
which four whistleblowers had provided information about alleged
bribery activities to the World Bank Group. That information was in
turn shared with the RCMP and used to obtain wiretaps against
former employees of SNC-Lavalin in a prosecution under the
Corruption of Foreign Public Officials Act. In a landmark
decision that has bolstered the protection of whistleblowers on the
international stage, the Supreme Court unanimously overturned the
lower court's decision and ruled that the World Bank
Group's privileges and immunities conferred under Canadian law
shield the World Bank Group from having to produce its
investigative files to defendants in a Canadian criminal
Osler represented TI Canada and TI Secretariat as interveners in
the appeal before the Supreme Court of Canada.
We will consider aspects of the World Bank Group
decision and continuing developments relating to the implementation
of the proposed OSC policy in future articles.
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