On November 19, 2018 the Alberta Securities Commission (“ASC”) announced the adoption of a new whistleblower program (the “Program”) aimed at enhancing protections for whistleblowers in Alberta.
Alberta Securities Commission Policy 15-602 details how whistleblowers may report a possible breach of securities laws, how any such tips may lead to further investigation by the ASC, in addition to outlining the measures available to safeguard whistleblowers from possible reprisal for their disclosures. Of note, whistleblowers are not eligible to be remunerated for their tips under the program.
Background in Alberta
As part of the three-year Strategic Plan announced in February 2017, the ASC committed to the creation and implementation of a whistleblower program designed to motivate individuals to provide tips regarding serious violations of Alberta securities law. The enactment of such a program follows similar whistleblower initiatives implemented in Ontario and Quebec, both in 2016.
What is a securities whistleblower program?
Securities whistle-blower programs are designed to assist employees who believe they have information regarding possible securities or derivatives-related misconduct in their organizations report such information to regulatory authorities, in addition to shielding those same employees from negative consequences that may arise as a result of their decision to report.
Key aspects of Alberta’s program
- The Program creates a new watchdog, the Office of the Whistleblower (“OWB”), that is responsible for the collection, review and management of tips.
- Tips may be made anonymously; however, anonymity may limit the ability of the ASC staff to thoroughly investigate.
- Reprisals against an employee in response to actual or anticipated whistleblowing activity by the employee or a relative, or in response to cooperating, testifying or otherwise assisting in Commission investigations or proceedings, is prohibited.
- Although the OWB commits to reviewing all tips, it is clear that not all tips will lead to investigations or other action.
- A whistleblower’s identity, and any information that could reasonably be expected to reveal a whistleblower’s identity, will be kept confidential.
A penny for your thoughts?
Alberta joins the ranks of Quebec, Britain and Australia in opting to not compensate whistleblowers for their submissions. Instead, these regulators have chosen to focus on ways to assure confidentiality and protect whistleblowers from reprisals at the organizations where wrongdoing is alleged. In Quebec specifically, after having reviewed the American, British and Australian systems, the regulator concluded there was not enough evidence to show that money generated more or better tips.
This philosophy stands in contrast to that which underpins similar legislation in the United States and Ontario. In both cases, whistleblowers are eligible to receive financial rewards. Proponents of this approach highlight that whistleblower tips have enabled the SEC to recover nearly $1 billion in financial penalties from wrongdoers.
Either way, would-be whistleblowers can be thankful they are not subject to Switzerland’s rigid secrecy law, which can impose jail terms of up to five years on whistleblowers.
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