On November 7, 2023, the British Columbia Securities Commission (“BCSC”) launched a whistleblower program designed to provide financial awards for qualified tips about investment fraud and other serious types of market misconduct. As such, the BCSC became the second securities regulatory authority in Canada to implement a whistleblower program that offers financial incentives in exchange for helpful information.
BC Policy 15-604 Whistleblower Program provides that an individual is eligible to receive a financial award if they disclose information that meaningfully contributes to an important enforcement result. Among other things, this may include the:
- issuance of a halt trade, temporary or preservation order;
- issuance of an administrative penalty;
- issuance of a notice of hearing;
- entering into of a settlement agreement;
- identification and location of assets of a person who has been ordered to pay monetary sanctions; or
- collection of outstanding amounts due from orders, settlement agreements or administrative penalties.
Individuals who provide information about only their own wrongdoing are excluded from receiving an award, as are individuals who:
- work for the BCSC, any other securities regulator or a law enforcement agency;
- have previously been contacted by the BCSC regarding the same matter; or
- provide information that is false or misleading, was acquired illegally, is subject to solicitor-client privilege that has not been waived or was disclosed in breach of rules of professional conduct.
Whistleblower awards may range from C$1,000 to C$250,000 and will be determined by the Executive Director of the BCSC. Consideration will be given to:
- how quickly the matter was reported;
- how clear, accurate, organized and complete the information is;
- how much the individual cooperates after providing the information;
- how much the information contributes to an important result;
- the seriousness of the misconduct reported;
- any hardship experienced by the individual as a result of exposing the wrongdoing; and
- how involved the individual was in the misconduct reported.
Where the information meaningfully contributes to several different enforcement results, the total maximum award will be capped at C$500,000. The Executive Director may, however, exercise discretion to increase an award, including beyond the prescribed maximum, if doing so is in the public interest. Awards are not subject to review or appeal.
Individuals who provided information prior to November 7, 2023, are not eligible to receive an award. By contrast, information received on or after November 7, 2023, but which relates to events that occurred prior to this date may be eligible for an award.
While the securities regulators in Ontario, Quebec and Alberta have whistleblower programs in place as well, neither the Autorité des marchés financiers nor the Alberta Securities Commission offers financial incentives.
The BCSC also released BC Notice 15-701 Credit for Cooperation in Enforcement Matters, which explains the benefits of self-reporting and the factors that the BCSC will consider when determining whether cooperation merits credit in enforcement matters. While individuals who provide information exclusively about their own wrongdoing are ineligible for a whistleblower award, cooperation may result in the BCSC recommending, among other things, that enforcement proceedings not be commenced, less serious allegations be pursued or reduced sanctions be sought.