In its recently announced three-year strategic plan, the Alberta Securities Commission included plans for a program to encourage people to report violations of securities laws. But unlike the whistleblower programs instituted by the Ontario Securities Commission and the US Securities and Exchange Commission (SEC), Alberta’s initiative would not give payment for information.
“At this time, the ASC is not considering financial rewards as part of our Whistleblower initiative,” ASC Senior Communications Advisor Tara Meinhardt told the Financial Post.
The regulator is offering informants something else in exchange: assurance of confidentiality and protection from reprisals at alleged errant organizations that they identify. Citing Quebec as an example, Meinhardt said that confidentiality and protection against retaliation are important to get people to report errant behavior at their organizations.
“As securities fraud and misconduct becomes ever more complex … it is imperative that we have access to the right information, expertise, processes and technology to detect ‘bad actors’ and analyze data and evidence,” the ASC said in their three-year strategic plan.
Last July, the OSC launched a paid whistleblower program, incorporating many features from the SEC program adopted after the 2008 financial crisis. The Ontario regulator found that monetary compensation was necessary to incentivize tipsters to expose wrongdoing that regulators would otherwise be unable to discover.
The OSC program pays a maximum of $5 million for tips that result in enforcement action against securities law violations such as insider trading, market manipulation, and disclosure violations. It generated more than 30 tips within its first two months.
The SEC’s whistleblower program has given out more handsome rewards. The US commission has so far released more than US$100 million to more than 33 informers, giving its second-highest single payment worth US$22 million in August.
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