Tariffs-Free Regulatory Importing?
Asad Akhtar
Part Two: Incentivized Whistleblower Program
The OSC’s controversial proposal to provide incentivized whistleblowing for securities
law breaches is one policy is that firmly grounded in the American experience. Consequently,
this segment of the paper will largely focus on the American experience before discussing the
proposed framework in Ontario.
A. The American Experience
In response to the financial crisis of 2008, the Dodd-Frank Wall Street Reform and
Consumer Protection Act35 was passed into American law in July of 2010. Dodd-Frank
introduced monumental overhauls to the American financial system, including increased
incentives and broader protection for whistleblowers of financial fraud.36
1. Purpose of Incentivized Whistleblowing
Corporate fraud remains a difficult subject area for law enforcement and regulators to
detect. This is in large part related to the complexity of the subject matter compounded by
limited access outsiders have to an organization’s day-to-day operations.37 The purpose of
whistleblowing legislation is to encourage an insiders to report suspicions of fraud to appropriate
entities without fear of retaliation from the employer.38
The monetary incentives offered under Dodd-Frank have been argued by the SEC as
being a necessary component of the program. In many instances, a whistleblower is forced to
take on significant economic risk in disclosing fraud. As anonymity is not guaranteed,
35
, Pub L No 111-203, § 748, 124 Stat. 1376 (2010), [Dodd-Frank].
Financial frauds include the violation of specific provisions contained in securities/commodities laws and the
Foreign Corrupt Practices Act.
37
Vanessa Castellina, “The New Financial Incentives & Expanded Anti-Retaliation Protection by Section 922 of the
Dodd-Frank: Actual Progress or Just Politics?” (2012), 6 Brook. J. Corp. Fin. & Com. L at 190.
38
Ibid at 191.
36
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