So you've stumbled upon evidence, or heard some office chatter, that your employer is engaging in some type of fraud, violation of securities law, or some other type of unlawful behaviour that runs afoul of your industry's regulatory laws.
Maybe you decide to bring this information to the attention of the media, a lawyer, the police, the Ontario Securities Commission (OSC), or whatever authority governs your industry. If you did, then you would be taking your first steps into the world of whistleblowing.
As you might imagine, whistleblowers can face all kinds of retaliation, reprisal, harassment and intimidation by their employer or even their co-workers for bringing illegal conduct into the spotlight. In the context of Securities Law in Ontario, there are very serious consequences to employers who reprise against an employee-whistleblower, such as a lawsuit by the employee as well as regulatory enforcement proceedings by the Ontario Securities Commission themselves.
Whistleblowers can report to the OSC directly or anonymously through a lawyer. Violations include, and extend beyond, activities like insider trading, fraud, market manipulation, misleading financial statements, and trading-related misconduct.
An example of one such case in which I represented an internal whistleblower was Coinsquare's reprisal against an employee-whistleblower. In that case, executives at this large cryptocurrency exchange, in fact, one of the largest in Canada, were found to have committed market manipulation, misleading statements to investors, in addition to the aforementioned reprisal.
“Despite several employees raising concerns about inflated trading volumes, Coinsquare not only stuck with the practice, but lied to investors about it and retaliated against a whistleblower,” said Jeff Kehoe, Director of the Enforcement Branch at the OSC.
Should an internal whistleblower be the subject of reprisal by their employer in this context, section 121.5 of Ontario's Securities Act contains strict penalties for such conduct, such as the right to sue for damages by the employee against the employer.
Among the prohibited conduct is (1) ending or threatening to end the employee’s employment; (2) demoting, disciplining or suspending, or threatening to demote, discipline or suspend an employee; (3) imposing or threatening to impose a penalty related to the employment of the employee; or (4) intimidating or coercing an employee in relation to his or her employment.
Moreover, even if the employee signed a confidentiality agreement, this law states that such agreements are void to the extent that it precludes an employee from providing information to the OSC, law enforcement, a regulator, or in court.
An arbitrator or the court hearing a complaint or lawsuit under this law may order one or more of the following remedies:
1) The employee’s reinstatement, with the same seniority status that the employee would have had if the contravention had not occurred;
2) Payment to the employee of two times the amount of remuneration the employee would have been paid by the employer if the contravention had not taken place between the date of the contravention and the date of the order, with interest.
In my experience, depending on the specific circumstances, these types of cases can result in six-figure or seven-figure settlements or awards in favour of whistleblowers where an employer runs afoul of the whistleblower protection laws in the Securities Act in Ontario.
Protection from SLAPPs
A SLAPP is an acronym for "strategic lawsuits against public participation". Whistleblowers might be concerned that their true statements to the media might invite a baseless defamation lawsuit by their employer (SLAPPs). However, there are strict protections in place in Ontario that protect these types of public-interest expressions of free speech. For more information about that, feel free to read my other article about Anti-SLAPP laws in Ontario.
Do you need to speak with a whistleblower lawyer in Ontario? Book a call with Ryan Keeney.