Alberta Securities Commission Announces New Whistleblower Program
November 26, 2018
On November 20, 2018, the Alberta Securities Commission (ASC) announced the creation of its whistleblower program (Program) through the adoption of ASC Policy 15-602 Whistleblower Program (Policy) and accompanying amendments to the Alberta Securities Act (Act). The Office of the Whistleblower was established to oversee and enforce the whistleblower legislation.
The Program’s goal is to facilitate reporting in order to protect Alberta investors, maintain the integrity of the Alberta capital market, and deter unlawful conduct. The Program attempts to simplify the reporting process, and provide rigorous protections for whistleblowers.
SIMPLIFIED WHISTLEBLOWER PROCESS
The ASC describes whistleblowers as employees who voluntarily provide information to the ASC about potential securities law violations by their employer. Employers can be companies, affiliated companies, or individuals. The Program aims to encourage employees to report tips on securities-related misconduct by their employer. Newly legislated notice mechanisms make reporting easier.
The ASC encourages whistleblowers to first report any suspected misconduct internally to their employer, before submitting a tip to the ASC. Following that, if the whistleblower does not consider the alleged misconduct to be sufficiently addressed, tips can confidentially be made to the Office of the Whistleblower. The Policy provides guidance to whistleblowers, including how to submit a tip, what to include in a tip, and information on how the ASC uses tips.
The Office of the Whistleblower will accept anonymous tips. However, the Policy notes that anonymous tips may limit the ability of ASC staff to investigate or follow up on a matter. To encourage whistleblowers to identify themselves, the Program provides for stronger protection for whistleblower confidentiality.
Unlike the Ontario Securities Commission’s program, the ASC does not offer financial compensation to whistleblowers. Rather, the Program provides for “credit for cooperation”, whereby whistleblowers involved in securities misconduct may, in some cases, be entitled to receive credit in enforcement proceedings.
Under the Program, there are heightened protections over the identity of whistleblowers. Section 57.2 of the Act mandates that a whistleblower’s identity is strictly confidential, and section 46.1(1) of the Act already provides that any information that could reveal a whistleblower’s identity cannot be compelled from the ASC, and can only be disclosed in limited circumstances. Additionally, where a whistleblower’s identity becomes known, the whistleblowers are protected from reprisal. Under the Program, employers are prohibited from taking retaliatory actions against an employee, or a relative of the employee, for acting as a whistleblower to the ASC (as per section 57.4 of the Act).
These protections are bolstered by the ASC’s ability to take enforcement action. The ASC has the power to investigate reprisals and impose sanctions against employers or a whistleblower’s colleagues who take retaliatory action against a whistleblower. Furthermore, the new section 211.0961 of the Act gives a whistleblower the right to claim certain damages for a reprisal.
The Program demonstrates the ASC’s desire to engage whistleblowers, investigate potential breaches brought forward by whistleblowers and potentially pursue enforcement action against companies. Whether the Program will be successful remains to be seen. It also remains uncertain how the Office of the Whistleblower will carry out its role in an ever-evolving Alberta securities market.
Companies should ensure that they have a comprehensive internal whistleblower reporting and investigation process that includes procedures to address tips and maintain whistleblower confidentiality.
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