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w w w . C A N A D I A N L a w y e r m a g . c o m M A Y 2 0 1 7 63 ing that the OSC will use all reasonable efforts to keep the identity of the whis- tleblower confidential. And, employers of whistleblowers are strictly prohibited from taking any retaliatory measures. By late September, the OSC reported it had received more than 30 "cred- ible" tips reporting potential violations of securities laws such as mistakes in accounting and disclosure violations. Critics of the OSC whistleblower program argue that providing financial rewards will give rise to an "American– style bounty program" and may lead to individuals coming forward with incomplete or misleading information that may implicate others for nefari- ous or monetary motives. Also, giving wrongdoers financial rewards may be contrary to the jurisdiction's common law tradition that one should not profit from their crimes. John Tuzyk, partner at Blake Cas- sels & Graydon LLP, says whistleblower programs with cash rewards represent the "continuing evolution" of the priva- tization of securities law enforcement that started with securities class actions. "You pay people to come forward with complaints and then class action lawyers bring secondary market claims: It's a market-driven privatized system," he says. Tuzyk argues the whistleblower pro- gram creates disincentives for anyone to use internal reporting programs and mechanisms that companies were already required to set up under the existing national rules. This means that corporations and employers lose control of the disclo- sure and internal investigation process, which could be problematic. "Essentially, individuals with evidence of wrongdoing may jump the queue to the detriment of the corporation/employer and may make it difficult for such entities to defend themselves or at least manage the process," Campion says. Campion says these criticisms "have had some traction." Last summer, Quebec's Autorité des marchés finan- ciers introduced its new whistleblower program, which does not provide any financial rewards, and Alberta's regula- tors have announced they have opted to go with a no-rewards-for-tips whistle- blower policy. In the face of all this, Campion says, corporations, with the assistance of their in-house legal teams, should create a culture of reporting internally without fear of retaliation and develop a concrete framework for addressing allegations made by whistleblowers. "As I recently said to one in-house lawyer on the topic: 'In the absence of an effective internal reporting process, whistleblowers will contact the OSC directly, particularly if they will be paid for their tips.'" Campion says the cash-for-infor- mation whistleblower program creates a big risk for companies that don't have robust reporting programs or the right culture and incentives provided to employees to report internally first. Instead, the incentive now is to go to the OSC. Academically, she says, the conclu- sions drawn elsewhere, such as in Que- bec and Europe, seem to suggest the Fresh Canadian legal news and analysis every day Get More Online CanadianLawyerMag.com | LawTimesNews.com | LegalFeeds.ca Untitled-3 1 2017-04-17 9:02 AM

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