3. To Reward or Not to Reward: A Cross-Jurisdictional Comparison of the Reasons Why Securities Regulators Have Adopted or Rejected Policies to Pay Whistleblowers

The idea that securities regulators should reward persons who ‘blow the whistle’ on fraudulent or corrupt conduct is starting to gain some traction around the world. Spurred on by the apparent success of the whistleblower award program administered by the Securities and Exchange Commission (SEC) in the United States, other countries have considered whether or not their securities regulators should adopt similar program. This article examines the reasons behind the introduction of the SEC program as well as the approach in three other jurisdictions, being Canada, Australia and the UK, all of which have considered whether to introduce such a regime. This analysis demonstrates that whether an award program for whistleblowers was adopted, and the form of the program, depended upon a number of factors. Such factors include whether or not the regulator itself supported the introduction of the program, the political landscape generally and opposition from business. Although empirical evidence about the costs and benefits of such programs contributed to the debate, it was not determinative because such empirical evidence is currently inconclusive. As such, there is a pressing need for more empirical evidence to fully assess the costs and benefits of such programs.