OSC takes formal action against executives in Bridging Finance fraud case

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OSC is seeking a ban on various types of participation in Ontario’s capital markets and penalties of up to $1-million for each alleged breach of securities laws

David and Natasha Sharpe, the husband-and-wife executive team that ran Bridging Finance Inc. until its 2021 receivership, defrauded investors out of millions of dollars through “dishonesty and deceit,” the Ontario Securities Commission alleged Thursday in an enforcement action against the couple.

Earlier this week, an Ontario court approved a plan by Bridging’s receiver, PricewaterhouseCoopers LLP, to wind down the company after a five-month sales process did not result in enticing bids for Bridging’s loan portfolio. PwC has estimated total losses will be around $1.3-billion.The OSC is seeking to ban the Sharpes and Mr. Mushore from various types of participation in Ontario’s capital markets, and is asking for penalties of up to $1-million for each alleged breach of securities laws.

Mr. McCoshen’s company, which is now insolvent, had borrowed an estimated $200-million from Bridging for the stated purpose of building a railway to transport bitumen from Northern Alberta to the ports of Alaska. The Sharpes approved a $32-million loan in June, 2019, to a company Mr. Ng owned and controlled, even though he had at that point contractually committed to buy half of Bridging. The OSC alleges the Sharpes directed an employee to prepare documents for Bridging’s credit committee, which approves loans, saying the money would be used by a numbered company to purchase commercial real estate developers in Canada.

When the OSC started its Bridging probe in 2020, it relied on its powers of compulsion to force Bridging to hand over internal records. It also issued summonses to Mr. Sharpe, Natasha Sharpe and Bridging part-owner Jenny Coco, compelling them to answer investigators’ questions.

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Ontario judge approves wind-down of Bridging Finance, investors estimated to lose $1.3-billionCourt-appointed receiver PricewaterhouseCoopers will oversee Bridging’s remaining loans and wind down the lender’s operations, while attempting to recover what it can for investors through litigation
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