Article content
Two principals at Bridging Finance Inc., an investment firm that once managed $2 billion in assets, committed fraud in connection with a series of loans, an Ontario Securities Commission tribunal has ruled.
It also found David and Natasha Sharpe made “false or misleading statements to the commission,” which obtained a court order in April 2021 to put Bridging into receivership after finding suspicious transactions during an investigation and uncovering what the regulator said was evidence that funds had been appropriated.
Article content
Bridging raised capital from investors to make loans to corporate borrowers in exchange for limited partnership units. Formal allegations of wrongdoing were made against the Sharpes in March 2022, nearly a year after the firm was put into receivership.
OSC staff alleged fraudulent schemes surrounding three sets of loans, with allegations of conflicts of interest and kickbacks, accusing the Sharpes of funnelling investor funds to themselves and Bridging as well as concealing their wrongdoing from investors.
On Monday, the three-member OSC tribunal issued its decision, which said the Sharpes had either committed fraud or directly engaged in conduct related to securities they knew or ought to have known perpetrated a fraud in connection with all three loans.
The ruling also said there were instances where they had made false or misleading statements to the commission and that they had authorized Bridging to contravene a section of the Securities Act (Ontario) by providing misleading information.
There were no direct findings against the firm, which remains in receiverships as PricewaterhouseCoopers International Ltd. seeks to recover funds for investors. Bridging’s court-appointed receiver in 2022 estimated investors could recover between $628 million and $804 million.
Share this article in your social network
