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New securities whistleblower service launched

|Written By Kelly Harris

It will take time to judge the effectiveness of a new whistleblower service launched by the Investment Industry Regulatory Organization of Canada, due to difficulties inherent with such programs, says a Toronto security lawyer.


The service intends to respond to reports or tangible evidence of wrongdoing, fraud, and unethical behaviour among individuals or firms in the investment industry by the self-policing IIROC. However, adverse outcomes for those doing the whistleblowing could make the services difficult to manage.

“The biggest issue associated with whistleblowing has nothing to do with securities laws,” says Sean Sadler, a partner in the securities regulation and investment products group of McCarthy Tétrault LLP. “This is a problem throughout our regulated society.”

Sadler says a combination of media attention, adverse effects in the workplace, and negative effects on the whistleblower’s company work against the effectiveness of such services. Given those challenges, it may take some time to judge the services’ effectiveness in boosting confidence in Canada’s investment industry.

“What I understand IIROC trying to do here is refine and improve the process so individuals will be more comfortable coming forward and that they’ll be able to be more confident that coming forward is the right thing to do,” says Sadler.

One of the ways IIROC may be attempting to build confidence is through direct access to the whistleblower team members. Information can be sent directly to members of a central whistleblowing team either by a toll-free phone call or e-mail.

This team is made up of four members including Rosemary Chan, senior vice president, general counsel, and corporate secretary. Other members include Maureen Jensen, senior vice president of surveillance and compliance, Carmen Crépin, vice president for Quebec, and Warren Funt, vice president for Western Canada.

“This service will ensure that individuals who believe that they have significant information to convey directly with IIROC senior staff who will ensure that each tip is properly evaluated and promptly dealt with,” IIROC president and chief executive officer Susan Wolburgh Jenah said in a news release.

IIROC is a self-regulatory organization overseeing all investment dealers and trading activity on debt and equity marketplaces in Canada. It was created in 2008. The new service is in addition to IIROC’s complaint line.

Phone calls to IIROC’s communications department regarding this story were not returned.

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