Canadian Bridging Finance placed in receivership after regulator finds mismanagement

TORONTO, May 3 (Reuters) - An Ontario court has placed Canadian lender Bridging Finance Inc in receivership and the provincial securities regulator ordered that all trading cease in securities in its funds for 15 days.

The actions followed an investigation by the Ontario Securities Commission (OSC) that found the Toronto-based company and Chief Executive David Sharpe mismanaged and misappropriated investment funds.

The OSC also suspended Sharpe’s registration as the company’s Ultimate Designated Person, responsible for its conduct and supervision, according to a statement issued late on Friday.

Sharpe did not respond to an email and voicemail message seeking comment. The company’s general counsel Kevin Moreau and director of investor relations Andrew Woo also did not respond to requests for comment.

The Ontario Superior Court of Justice on Friday appointed PriceWaterhouseCoopers as BFI’s receivers. BFI managed about C$2 billion ($1.6 billion) at the end of December 2020.

In its order, the OSC said its investigation had found that between Jan. 1, 2017, and April 30, 2020, BFI had used C$35 million of funds it managed to make an acquisition for itself; that Sharpe had personally received C$19.5 million from a person who had borrowed over C$100 million from BFI; and that BFI lent almost C$100 million to a borrower who was negotiating the acquisition of a 50% stake in the lender.

BFI’s senior management team, including Sharpe, mismanaged funds, “breached numerous securities laws and regulations... failed to act in the best interests of the respondents’ stakeholders,” the OSC said in the court documents. ($1 = 1.2266 Canadian dollars) (Reporting By Nichola Saminather; Editing by Howard Goller)