Governments across the world continue to recognize the importance of whistleblowers with agencies in Germany and Canada opening up whistleblower programs to collect information about violations of their laws. Australia has extended its consideration of whistleblower rewards to include international tax avoidance, which it is studying. And Ontario Canada’s program to reward whistleblowers for information concerning securities violations will soon launch.
BaFin, the German financial regulator, will open an office for corporate whistleblowers on Monday. The office will offer anonymous reporting as well as follow special protocols to ensure the confidentiality of identities provided is maintained. There was no mention of rewards in the Reuters article.
Montreal’s securities regulator, known as AMF, also launched its whistleblower program two weeks ago. AMF regulates conduct on the Montreal Exchange, which offers trading in derivatives such as futures and equity options. Although AMF will offer immunity from civil suits related to the reporting of wrongdoing, the securities regulator declined to authorize whistleblower rewards. In a statement, the agency said that their analysis indicated the key component to encourage whistleblowers were the protections offered rather than the monetary awards.
We’re also less than two weeks away from the launch of the Ontario Securities Commission whistleblower program. This Canadian whistleblower program for providing insider information about accounting fraud, market manipulation and insider trading will pay up to a maximum of $5 million.
The maximum reward for information is $1.5 million unless the regulator collects at least $10 million in sanctions. If this threshold is met, the individual is eligible for between 5 and 15 percent of the sanctions collected up to the maximum ($5 million)
Unlike the United States, securities regulation is generally regulated regionally in Canada. The OSC oversees trading on the Toronto Stock Exchange, which is the eight largest exchange in the world by market capitalization.
Canada has been one of the largest sources of whistleblower tips to the U.S. Securities and Exchange Commission’s whistleblower program from outside the 50 states. The SEC program was created by the Dodd-Frank Act and offers rewards of between 10 and 30 percent to eligible individuals providing information that results in monetary sanctions of more than $1 million.
Other countries have also been considering adding rewards. In February, the Australian Financial Review published an article indicating that Australia was considering rewards for tax whistleblowers similar to the IRS whistleblower program. The Australia program is expected to be aimed at international tax avoidance.
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