The provincial regulator called on Parliament to revise the Bankruptcy and Insolvency Act to address a gap in the law, which BCSC chair Brenda Leong said allows “people who cheat or swindle investors [to] avoid paying administrative penalties through an exit from bankruptcy.” (The Logic)

Talking point: The regulator is responding to a Supreme Court of Canada ruling Wednesday, which said that Thalbinder and Shailu Poonian were not required to pay $13.5 million in fines to BCSC, because the debt qualified to be cleared through the bankruptcy process. The securities regulator said that more than 40 people and companies have had their BCSC debts extinguished through bankruptcy since 2001, avoiding a collective $80 million in fines. The Supreme Court found that while fees “imposed by a court” are considered exceptions to the debt relief allowed by the Bankruptcy and Insolvency Act, penalties from regulatory agencies don’t qualify. It’s a “significant flaw in federal bankruptcy law,” Leong said. “An obvious solution is to revise the law to deal with this ‘escape hatch.’”