B.C. Adopts Novel Whistleblower Program to Root Out Investment Fraud

From the BC Securities Commission

Monetary awards for tipsters range from $1,000 to $500,000

B.C. Adopts Novel Whistleblower Program to Root Out Investment Fraud

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As the guardian of the province’s investment markets, the role of the BC Securities Commission (BCSC) is to create and enforce rules that keep the investment marketplace fair, honest and resilient. To do this effectively, we look for innovative ways to uncover investment fraud and serious market misconduct. The launch of our new whistleblower program is an example of how we tailor our enforcement work to B.C.’s unique investment market.

At its core, a whistleblower is anyone who exposes wrongdoing. Headline grabbing cases like Watergate and Enron are famous examples of whistleblowing. When it comes to rooting out illegal activity in the investment markets, the BCSC depends on the public and company insiders providing tips to reveal wrongdoing that would otherwise be difficult to detect.

At the BCSC, we’ve taken a specialized approach in developing our whistleblower program, one that is tailored to the structure and diversity of our province’s investment marketplace. B.C. is home to a vibrant venture market with thousands of small public and private companies, many of which are in the early stages of capital raising. Identifying misconduct in this market requires a whistleblower program that encourages a variety of tips from a variety of people — from poker buddies to disenchanted significant others to bookkeepers to CFOs — that may help us break open a case.

On November 7, 2023 — we launched a novel whistleblower program that provides monetary awards ranging from $1,000 to $500,000 for helpful tips which lead to a successful enforcement outcome in serious matters, like illegal insider trading, market misconduct, and investment fraud.

Whistleblowers must provide information about someone else’s wrongdoing to qualify for a whistleblower award. If they provide information about themselves only, they may qualify for credit for cooperation under a different BCSC policy.

The BCSC’s Office of the Whistleblower accepts tips through an online reporting tool, by phone and through the mail.

How We Pay Whistleblowers

Our program is unique because we pay for a variety of different types of enforcement outcomes like temporary orders, preservation orders, halt trade orders, information that leads to issuing allegations, or even information that helps us collect on outstanding fines. While the awards may be lower than those provided by other market regulators, the BCSC will pay for more enforcement outcomes and will pay more quickly.

Anonymity and Protection for Whistleblowers

Individuals can submit information anonymously, but they must reveal their identity before receiving an award. Information about a whistleblower will not be shared outside the BCSC without a whistleblower’s consent unless the BCSC is required to do so, such as to respondents in a hearing, in response to a legal demand, and if ordered by the Privacy Commissioner. The BCSC does not provide a guarantee of confidential informer privilege.

Whistleblowers are protected from reprisal by B.C.’s Securities Act, which prohibits retaliation that is solely the result of a person providing information to the BCSC.

How Can the Legal Community Help?

The legal profession is in a unique position to help combat investment fraud and other market misconduct. Individuals looking to report misconduct may seek counsel to help them make this difficult decision. The BCSC encourages you, as a legal professional, to take some time to learn more about our whistleblower program to assist you in counselling individuals considering reporting illegal activity.

To learn more in-depth information about the BCSC’s program, or to file a tip, visit: bcsc.bc.ca/report-to-us. If you are legal counsel, or you are from another securities jurisdiction, and you have a question, please contact the Office of the Whistleblower at 604-899-6729.

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