BURST
The B.C. Securities Commission has granted its first “whistleblower award” to a tipster who provided information about suspected misconduct.
Commission deputy-director of enforcement Mark Hilford said Tuesday that the whistleblower received $25,000, although he wouldn’t provide more details about the case to protect the person’s identity and the investigation.
Hilford said the fact a payment has been made before a hearing is “really what distinguishes our program from all the others.”
“Other programs, they don’t pay until the hearing is done, and they’ve won, and the big fines been issued and paid. Then they reward a whistleblower,” Hilford said. “So it highlights the unique nature of our particular program.”
The securities commission launched the whistleblower program in November 2023 to increase the number and quality of public tips about investment fraud and other forms of market misconduct.
Hilford said that after the first year of the program, overall tips from the public were up 33 per cent, with 255 specific whistleblower tips on top of all the others received.
“We were pretty happy with that. We also went back and did a sort of a quality assessment of all the tips we got in that same time period, and we had 60 per cent graded as either good, very good, or excellent.”
He expects more payouts to be made now that the program is in full swing and investigations into other whistleblower tips are underway.
Financial awards range from $1,000 to a maximum of $500,000, based on how quickly the information was reported, how much it contributed to the investigation, and the seriousness of the misconduct.
Commission chair Brenda Leong said whistleblower information “can make a real difference in our ability to act quickly to protect investors and the integrity of our investment markets.”
“The more valuable your information is, the more we may pay you,” she said.
The award is paid for information that leads to a halt-trade order, preservation orders, and formal allegations.
Hilford said that about half of whistleblowers choose to report anonymously, while half identify themselves when they contact the commission. Most of the whistleblower — 77 per cent — are using the online portal to provide their information . Twenty-two per cent call, and just one per cent “did it the old-fashioned way and mailed it.”
Some whistleblowers don’t want to get paid, while others are motivated by the potential for cash, Hilford said. A third category that the commission is targeting is “the angry person who wants to do something about it and wants to get even” after being victimized by an investment scam.
The commission has launched a number of advertising campaigns to warn the public about investment fraud, which is on the rise globally.
“The fraud isn’t unique to British Columbia or Canada. It’s a worldwide problem that is exacerbated by a number of factors,” Hilford said. “The problem is there’s no barrier to entry for a fraudster — open up an email account, internet access. You go back 25 or 30 years, well, there was actually a cost to entering into this business. You had to mail out your fraudulent promotions and pay for the stamp. Now, it’s basically almost free.”
Blueksy: @kimbolan.bsky.social