On November 7, 2023, the British Columbia Securities Commission (BCSC) announced that it would start paying whistleblowers who provide helpful information about investment fraud and other serious types of market misconduct.
Whistleblowers will be rewarded amounts ranging from $1,000 to $250,000 if the information they provide leads to enforcement action by the BCSC. The minimum and maximum amount whistleblowers can expect to receive is as follows:
Issuance of a halt trade, temporary or preservation order: $1,000 to $25,000
Issuance of an Administrative Penalty Imposed with Notice or order: 5% to 10% of the amount, up to a maximum of $50,000
Issuance of a notice of hearing: $5,000 to $100,000
Entering into of a settlement agreement: $10,000 to $250,000
Issuance of sanctions after a hearing: $10,000 to $250,000
Identification and location of assets of a person who owes monetary sanctions to the BCSC: $1,000 to $25,000
Collection from a person who owes monetary sanctions to the BCSC: 5% to 10% of any collected amount, up to a maximum of $250,000
The exact amount that a whistleblower is entitled to receive will be determined after considering various factors, including: how quickly the information was reported; how clear, accurate, organized and complete the information was; how a whistleblower cooperated with the BCSC; how much the information contributed to the enforcement outcome; and the seriousness of the misconduct.
A whistleblower can receive more than one reward for the same information, with the maximum payout capped at $500,000. If there are multiple whistleblowers on the same matter, the maximum total payout combined of all whistleblowers for that matter is $500,000.
Whistleblowers will be able to provide the BCSC with information by: submitting a whistleblower form and supporting documents via an online portal established by the BCSC; mailing a whistleblower form and supporting documents to the BCSC; or calling the whistleblower hotline established by the BCSC.
Whistleblowers can file their tip anonymously, but they must reveal their identity to the BCSC before receiving a reward. The BCSC is not providing whistleblowers with any guarantee or assurance of confidential informer privilege. The BCSC has stated that it will only share the identity of a whistleblower inside the BCSC on a need-to-know basis, unless required to do so. Examples of when the BCSC will be required to share a whistleblower’s identity include when the BCSC: issues a notice of hearing; receives a demand that legally requires it to do so; or receives an order from the Privacy Commission in connection with a freedom of information request.
Whistleblowers who provided information to the BCSC prior to November 7, 2023 are not eligible to receive rewards. Those who provide information after November 7, 2023, even if such information relates to misconduct that occurred prior to November 7, 2023, will be eligible to receive rewards.
Please contact us if you would like further information.
DISCLAIMER: This post is intended to convey general information about legal issues and developments as of the date above. It does not constitute legal advice and must not be treated or relied on as such.