Ex-CEO of Bridging Finance seeks order to quash OSC investigation

Former chief executive of beleaguered private lender claims investigators abused process by violating privacy rules

Ex-CEO of Bridging Finance seeks order to quash OSC investigation

David Sharpe, the ousted CEO of besieged private lender Bridging Finance, is seeking an order to quash the investigation of his firm after investigators for the Ontario Securities Commission (OSC) allegedly violated his right to privacy under the Ontario Securities Act.

According to a Notice of Application made public by the Ontario Securities Commission on July 9, Sharpe is asking for a declaration that OSC’s enforcement staff violated sections 16 and 17 of the Act when it disclosed and facilitated the “unlimited public dissemination” of compelled evidence, when the evidence should have been kept private.

“Staff advised Sharpe … that ‘there is a high degree of confidentiality associated with this matter’ and specifically directed Sharpe to the full text of section 16 – the confidentiality provision – of the Act,” the notice said, referring to a past OSC summons compelling Sharpe to answer questions as the regulator looked into possible improprieties at his firm.

He was reportedly interviewed over three days – October 23, 2020, October 27, 2020 and April 29, 2021 – and he answered all questions that OSC staff asked. In answering those questions, he also expected that information he provided would be kept private, confidential, and protected.

That expectation was violated on April 30, according to the OSC notice, when OSC staff submitted filings to the Superior Court of Justice that included excerpts from the transcript of Sharpe’s interview on October 23, as well as the entire rough draft of the transcript of his April 29 interview.

The watchdog’s staff reportedly failed to obtain an order from the OSC to authorize the disclosure of the evidence, as required under section 18 of the Securities Act. Staff also purportedly did not notify Sharpe that the testimony he provided would be disclosed in court proceedings and, subsequently, posted on the website of PwC, which was appointed as the receiver to Bridging Finance as the OSC conducted its investigation.

In his application to the OSC, Sharpe sought a declaration that OSC’s enforcement staff violated sections 16 and 17 of the Act, and in doing so engaged in abuse of process. He also sought an order quashing the order that authorized the investigation of Bridging Finance, and a declaration that none of the compelled evidence disclosed to date, nor any evidence obtained as a result of the compelled testimony being disclosed, be used in any future proceeding.

The application also asks for requests to be submitted to the Superior Court and PwC that would remove evidence of Sharpe’s testimony from court filings and the PwC website.

Aside from causing “irreparable prejudice to Sharpe,” the application said the improper disclosure of his testimony has “fatally undermined the integrity of Staff’s investigation” and “potentially prejudiced the interests of investors by exacerbating negative media attention to Bridging Finance and its borrowers.”

The OSC will consider Sharpe’s application for relief in a hearing on July 22.


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