B.C. Securities Commission awards first $25,000 whistleblower payout

The B.C. Securities Commission has issued its first whistleblower award of $25,000 to a tipster reporting suspected market misconduct. Tips rose 33% in the program's first year.

B.C. Securities Commission issues first whistleblower award of $25,000

The B.C. Securities Commission has paid out its first whistleblower award — $25,000 to an individual who provided information about suspected market misconduct, Vancouver Sun Crime reports.

Commission deputy director of enforcement Mark Hilford confirmed the payment on Tuesday, declining to name the recipient or disclose details of the underlying case in order to protect the tipster's identity and the ongoing investigation.

Hilford said the program's willingness to pay before a hearing concludes sets it apart from comparable programs elsewhere. "Other programs, they don't pay until the hearing is done, and they've won, and the big fine has been issued and paid. Then they reward a whistleblower," he said. "So it highlights the unique nature of our particular program."

Program launched in November 2023

The commission introduced the whistleblower program in November 2023, with the goal of increasing both the volume and quality of public tips about investment fraud and other forms of market misconduct.

After the first full year of operation, overall tips from the public were up 33 per cent, with 255 tips submitted specifically through the whistleblower channel. A subsequent quality review rated 60 per cent of all tips received in that period as good, very good, or excellent, Hilford said.

"We were pretty happy with that," he added, noting he expects additional payouts as investigations into other whistleblower tips advance.

Financial awards range from $1,000 to a maximum of $500,000. The amount is determined by how quickly information was reported, how substantially it contributed to an investigation, and the seriousness of the misconduct involved. Awards are triggered when a tip leads to a halt-trade order, preservation orders, or formal allegations.

Half of tipsters choose anonymity

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." She added: "The more valuable your information is, the more we may pay you."

Hilford said roughly half of whistleblowers submit their information anonymously, while the other half identify themselves. The majority — 77 per cent — use the commission's online portal; 22 per cent call in; and one per cent, in Hilford's words, "did it the old-fashioned way and mailed it."

Motivations vary. Some tipsters decline payment entirely. Others are drawn by the financial incentive. A third group the commission is actively trying to reach consists of people who have personally been victimized by investment fraud and want to take action.

Investment fraud rising globally

The commission has run several advertising campaigns warning the public about investment fraud, which Hilford described as a growing problem well beyond British Columbia's borders.

"The fraud isn't unique to British Columbia or Canada. It's a worldwide problem that is exacerbated by a number of factors," he 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."

Source: Vancouver Sun Crime