Why Blowing the Whistle Is the Right Thing — and How to Do It Right

Individuals who disclose wrongdoing are sometimes subjected to negative perceptions, but nothing is more counterproductive to societal progress than such stigma. Reporting unethical or illegal conduct is both appropriate and necessary and those who demonstrate the courage to come forward should be recognized as heroes—not disparaged. Whistlblowers play a critical role in promoting positive change.

The Origins of Whistleblower Protection: Marven and Shaw’s Landmark Stand

In 1777, U.S. naval officers, Richard Marven and Samuel Shaw, made a bold and dangerous decision to expose the misconduct of their commander-in-chief, Commodore Esek Hopkins[1]. At the time, the stakes were extraordinarily high. They were challenging a powerful and well-connected figure from a prominent family, in an era when whistleblower protections did not exist. Despite the risks, Marven and Shaw’s courageous actions laid the foundation for the world’s first whistleblower protection law, passed by the U.S. Congress in 1778.

What Happened?

Commodore Hopkins, the head of the Continental Navy, had engaged in serious misconduct. He was accused of looting British naval and merchant vessels and diverting the proceeds for personal gain, leaving sailors unpaid. More disturbingly, he violated Congressional directives by torturing British prisoners of war, despite clear instructions that prisoners of war were to be treated humanely. Marven and Shaw, along with eight other colleagues, reported these abuses to Congress. Their disclosures led to Hopkins being relieved of his command and dishonorably discharged.

However, the story didn’t end there. Following his dismissal, Hopkins retaliated by having Marven and Shaw arrested on charges of libel. In response, the two officers petitioned Congress for protection. Recognizing the importance of safeguarding individuals who report wrongdoing, Congress passed a whistleblower protection law on July 30, 1778. This landmark legislation not only supported Marven and Shaw but also authorized the payment of their legal expenses from public funds, signaling a commitment to protecting future whistleblowers.

Why Whistleblowers Matter

This historical account underscores the vital role whistleblowers play in promoting accountability and integrity. Their actions can lead to significant reforms and prevent further harm. As Bruce Dorris, J.D., CFE, CPA, and President and CEO of the Association of Certified Fraud Examiners (ACFE), notes, “Research by the ACFE indicates that whistleblower tips are by far the most common way that fraud schemes are detected.” Organizations that prioritize ethical conduct and compliance recognize the value whistleblowers bring and often establish internal reporting mechanisms to encourage the safe disclosure of misconduct.

In parallel, government agencies and securities regulators across Canada and other parts of the world have developed external whistleblower programs to ensure that wrongdoing is identified and addressed early, especially when internal systems fail or when the misconduct falls outside the scope of corporate oversight.

The Alberta Securities Commission’s Whistleblower Program

In Alberta, the Alberta Securities Commission (ASC) serves as the regulatory body responsible for enforcing the province’s securities laws. In 2018, the ASC established its whistleblower program to provide a safe and confidential avenue for employees to report securities-related misconduct involving publicly traded companies, registered firms or companies (or persons) illegally engaged in regulated activity. The program is designed to protect whistleblowers from retaliation and to ensure their identities remain confidential. By submitting tips, whistleblowers help the ASC detect and investigate breaches of securities law, ultimately supporting its mandate to foster a fair and efficient capital market and protect investors.

Whistleblowing Is a Protected Activity

Unlike the uncertain legal landscape of 1777, whistleblowing is now a protected activity in many jurisdictions and sectors across the world, including in Alberta’s capital market. Individuals who report wrongdoing can do so with confidence, knowing that their identities will be kept confidential and that they are protected from retaliation, provided they qualify as whistleblowers as defined by the Securities Act (Alberta). If reprisals do occur, whistleblowers have legal recourse through the ASC’s enforcement framework or the Alberta courts.

Though Alberta courts have not yet tested the anti-reprisal protections in the Securities Act, an Ontario Superior Court ruling[2] in September 2025 interpreting similar protections, found that it was unlawful to fire a CEO for raising concerns about potential violations under the Ontario Securities Act. The court adopted a “mixed motive” standard, holding that employer reprisals are illegal if protected activity was even part of the reason for adverse action taken against an employee. Similar judicial reasoning may apply in Alberta.

Aside confidentiality and anti-reprisal, the Securities Act offers other legal protections including limited immunity and bans on employment contracts that restrict reporting. These additional protections act as a safeguard against retaliatory litigation. In addition, employment contracts that purport to prohibit whistleblowing are unenforceable against a whistleblower. While whistleblowing can be difficult, Alberta’s securities laws offer significant support and rigorous protection for those who choose to come forward.

Preserving Integrity and Reputation

Beyond contributing to market integrity, whistleblowers may also protect their own professional reputations by exposing fraud or unethical behavior. Reporting misconduct can be a form of self-preservation, especially when one’s career or credibility is at risk. While some may feel conflicted about being motivated by self-interest, it’s important to recognize that protecting oneself and serving the public interest are not mutually exclusive. In fact, whistleblowing often reflects a commitment to personal ethics and professional standards, whether the disclosure is made internally through a workplace hotline or externally via a regulatory program like the ASC’s.

Doing It Right: Ethical and Strategic Whistleblowing

As with any serious action, there is a right and wrong way to blow the whistle. The first consideration is ethical: the information being reported must be truthful and not misleading. At the time of disclosure, the whistleblower must reasonably and honestly believe the facts to be accurate. Submitting false or misleading information can result in the forfeiture of whistleblower protections and may lead to regulatory or criminal consequences under the Securities Act or the Criminal Code of Canada.

The second consideration involves strategic precautions to maintain confidentiality and minimize the risk of retaliation. While internal policies and regulatory programs offer safeguards, whistleblowers must also take personal steps to protect themselves. This includes keeping the fact of their disclosure private. Sharing that one has reported misconduct—especially with third parties (except legal counsel)—can compromise confidentiality and increase the risk of exposure during an investigation.

Conclusion

Whistleblowing can benefit everyone: investors, corporations, regulators, and the whistleblowers themselves. It promotes transparency, accountability, and ethical conduct. Understanding the legal framework and protections available is essential for anyone considering reporting misconduct. By acting ethically and strategically, whistleblowers can make a meaningful impact while safeguarding their own interests. The legacy of Marven and Shaw reminds us that speaking up, even in the face of adversity, can lead to lasting change.

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Disclaimer:

Any views or opinions expressed in this piece are those of the author and do not necessarily reflect the views of his employer or colleagues.

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[1] Stephen M. Kohn, The New Whistleblower’s Handbook: A Step-by-Step Guide to Doing What’s Right and Protecting Yourself, 2nd ed (Essex, CT: Lyons Press, 2017)

[2] McPherson v. Global Growth Assets Inc., 2025 ONSC 5226