Bridging Finance Executives David and Natasha Sharpe Found Guilty of Fraud by OSC Tribunal
David and Natasha Sharpe, former executives of Bridging Finance Inc., have been found guilty of fraud by the Ontario Capital Markets Tribunal. The independent division of the Ontario Securities Commission (OSC) ruled that the Sharpes personally benefited from millions in kickbacks and engaged in fraudulent financial practices involving investor funds.
Fraudulent Activities and Kickbacks
Bridging Finance, once a major player in Canada’s private lending sector, managed $2.09 billion on behalf of 26,000 investors. However, the tribunal uncovered a series of fraudulent schemes orchestrated by the Sharpes:
- Kickbacks from Sean McCoshen: The tribunal found that Bridging lent over $150 million to McCoshen’s company, Alaska-Alberta Railway Development Corporation (A2A). In return, McCoshen sent $19.5 million to the Sharpes, with $18.2 million traced directly to investor funds.
- Ninepoint Partners LP Buyout: The Sharpes orchestrated a $40-million loan to an existing client and used the funds to settle a corporate dispute with Ninepoint, concealing the transaction from investors.
- Loans to Gary Ng: A series of loans to Gary Ng, which included a $35-million loan to one of his companies, a transaction that bypassed Bridging’s credit committee and allegedly led to a $1 million payment from Ng to the Sharpes.
Obstruction and Witness Intimidation
In addition to financial misconduct, the Sharpes were found guilty of obstructing the OSC’s investigation. They made false statements during compelled interviews and attempted to intimidate witnesses through threatening and profanity-laden messages.
Investor Impact and Losses
Bridging Finance was placed under a court-ordered receivership in April 2021 after the OSC began investigating allegations of misusing investor funds. PricewaterhouseCoopers (PwC), the appointed receiver, estimates that investors stand to lose approximately $1.3 billion – nearly two-thirds of the total funds invested.
Ongoing Legal Battles
The tribunal’s ruling is not the end of the Sharpes’ legal woes. Bridging Finance is embroiled in multiple lawsuits, including its controversial involvement in The One, a luxury condominium project in Toronto. Allegations include the misuse of investor funds as collateral for the development, further deepening investor losses.
Next Steps: Sanctions and Criminal Investigations
A hearing to determine penalties and sanctions against the Sharpes and former Bridging compliance officer Andrew Mushore is scheduled for December 6, 2024. While the tribunal can impose financial penalties under the Ontario Securities Act, criminal charges would require action from the RCMP’s Integrated Market Enforcement Team, which is still investigating the case.
Sharpes’ Appeal Plans
David Sharpe has announced plans to appeal the tribunal’s decision, citing alleged violations of his rights under the Canadian Charter of Rights and Freedoms. He claims his compelled interview transcripts were unlawfully disclosed during the investigation.
The fraud at Bridging Finance underscores the risks of high-return investment schemes and highlights the importance of regulatory oversight. With more than $1 billion in losses, the case serves as a cautionary tale for retail and institutional investors alike.
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