Whistleblowers in Canada who report financial fraud to Quebec's Autorité des marchés financiers (AMF) won't be eligible for rewards as a result of a recent AMF decision - unlike whistleblowers who report fraud to the US or to the Ontario Securities Commission (OSC).
Phillips & Cohen partner Steve Hasegawa, a successful US whistleblower attorney, explains in an op-ed in the Montreal Gazette why whistleblower reward programs are essential for rooting out fraud and how they benefit investors. He notes that 10 percent of the non-US whistleblowers who file claims with the US Securities and Exchange Commission come from Canada.
Below is an excerpt from Hasegawa's op-ed. You can read the full article at the Montreal Gazette.
Both the Ontario Securities Commission (OSC) and the Autorité des marchés financiers (AMF) looked at the same evidence - primarily the whistleblower reward programs in the United States - and reached opposite conclusions.
OSC saw the significant assistance that whistleblowers in the U.S. have provided to expose and stop corporate wrongdoing, and decided to offer monetary rewards as the U.S. programs do, recognizing that blowing the whistle can cost people their livelihoods and that rewards are essential to a successful whistleblower program. This is particularly true for attracting high-level insiders with detailed information about corporate fraud.
In contrast, AMF decided against offering whistleblowers rewards, basing its decision on an internal study concluding that "it cannot be established with certainty ... that a financial incentive generates more quality whistleblowing."
AMF's conclusion ignores decades of results from whistleblowing programs and will hamper Quebec's ability to detect and remedy financial fraud.
For example, the U.S. Securities and Exchange Commission (SEC) says its five-year-old whistleblower reward program is a game changer in the enforcement of securities laws and the protection of investors and the marketplace. Information from just whistleblowers my firm represents has helped stop fraudulent practices that were costing investors billions of dollars.