The Ontario Securities Commission (OSC) is seeking to put former Bridging Finance Inc. (BFI) executives, David and Natasha Sharpe, into bankruptcy, and to have a trustee appointed to oversee their assets.
In June, the Capital Markets Tribunal ordered $27.56 million in disgorgement, penalties and costs against the pair after finding that they engaged in several securities-related frauds involving their firm and its funds. David Sharpe was former CEO of the failed alternative fund manager and his wife Natasha was Bridging’s founder and former chief investment officer.
Now, the OSC has filed applications under the Bankruptcy and Insolvency Act, which asks the Ontario Superior Court of Justice to petition the Sharpes into bankruptcy and appoint a trustee over their assets.
“These applications follow the Sharpes’ failure to pay the financial sanctions and costs ordered by the Capital Markets Tribunal,” the regulator said in a release.
Those decisions by the tribunal are being appealed by the Sharpes. In July, a notice of appeal to challenge the regulatory tribunal’s rulings was filed in the Ontario Divisional Court.
In the meantime, the OSC said that its applications are being brought “to preserve powers of the trustee, if appointed, and the Court to review certain transactions made by the Sharpes.”
The regulator also said that its efforts to recover assets from the Sharpes “may assist in maximizing potential recoveries for BFI unitholders.”
Investors in the Bridging funds are currently expected to lose over $1 billion from the collapse of the firm. The receiver appointed over the firm and its funds has estimated that investors will recover between 34% and 42% of the $2.1 billion that was invested in the funds when the firm was put into receivership by the OSC in April 2021.