Industry | Financial services |
---|---|
Fate | in receivership with PricewaterhouseCoopers LLP the court-appointed receiver |
Headquarters | Toronto, Ontario , |
Key people | David Sharpe, Natasha Sharpe, Andrew Mushore, Jenny Coco, Rock-Anthony Coco, Gary Ng, and Sean McCoshen |
Products | private credit |
Total assets | $2.1 billion CAD (2021) [1] |
Website | www |
Bridging Finance Inc. was a Canadian private lender based in Toronto, Ontario, Canada that was placed in receivership by the Ontario Court of Justice following an investigation by the Ontario Securities Commission (OSC). Investors in the firm's funds are expected to lose approximately 58-66% of their capital. That is one of the "largest collapses of an investment fund in Canadian history." [2] In 2023, the Ontario Securities Commission (OSC) alleged that former CEO David Sharpe, former Chief Investment Officer Natasha Sharpe and former Chief Compliance Officer, Andrew Mushore "committed fraud, misappropriated funds, made misleading and untrue statements and misled investigators." [3] On October 29th 2024, the Ontario Securities Commission Tribunal ruled that Bridging Finance executives David and Natasha Sharpe committed fraud, and that Andrew Mushore "indirectly participated" in the fraudulent activities. [4]
Bridging is owned by Natasha Sharpe, Jenny Coco and Rocky Coco (the Cocos are brother and sister owners of Coco Paving Inc.). [5] Sharpe worked with the Cocos in a previous role at the Bank of Montreal where she provided commercial banking services to Coco Paving. [6] Sharpe joined the board of directors of the Coco Group in 2011. Subsequently, the Cocos provided capital to launch Bridging in 2012.
In 2019, Natasha Sharpe and other shareholders agreed to sell 50% of Bridging's equity to Gary Ng for $50 million. It was later revealed that Ng paid for the investment with the proceeds of a $32 million loan that he received from one of Bridging's credit funds. [7] This use of client money to fund a capital transaction that benefited Bridging's owners is one of the transactions listed by the OSC as being under investigation
The principal conflicts of interest being investigated by the OSC:
1. Payments from Sean McCoshen related to loans made to McCoshen's company Alaska-Alberta Railway Development Corporation. [8] The OSC alleges that following the funding of loans to various McCoshen companies, McCoshen funnelled a total of $19.5 million to David Sharpe, largely through his personal chequing account. [9] The OSC discovered that Natasha Sharpe received $250,000 from one of McCoshen's companies.
2. Use of Bridging client funds to pay for purchase of Ninepoint Partners LP's management interest in Sprott Bridging Income Fund LP. With the cooperation of Rishi Gautam, who was a Bridging borrower at the time, the OSC discovered that the Sharpes and Mushore misappropriated $40 million to pay for the purchase, which ultimately benefited Bridging's shareholders Natasha Sharpe and the Cocos. [10]
3. The OSC has discovered that Mr. Sharpe was able to facilitate their misappropriation by a false loan invoice by using the signature of one of their borrowers from a completely different loan document. This made it appear as though the money came from elsewhere. This action by Mr. Sharpe wrongfully implicated Mr. Gautam who was the CEO of MJardin Group Inc. at the time. [11]
4. The use of Bridging client funds to enable Gary Ng to purchase 50% of Bridging's shares from Natasha Sharpe and the Cocos. After Ng was the majority shareholder of Bridging, Bridging provided additional loans to various Ng-controlled companies. The OSC also states that Ng paid $500,000 to each of David and Natasha Sharpe in November 2019. According to the OSC, "neither payment served a legitimate commercial purpose". [10]
Bridging was placed into receivership by the Ontario Court of Justice on 30 April 2021. PwC terminated David Sharpe and Natasha Sharpe within days of taking over as receiver. [5]
In its role as receiver, PricewaterhouseCoopers (PwC) launched a process to sell Bridging's debt portfolio. The proceeds of the sale would be used to partially repay investors in Bridging's private credit funds. In April 2022, PwC stated that the bids that it received for the portfolio were below the likely value of an orderly liquidation. PwC then recommended to the court that the portfolio be allowed run-off over a five-year period. [1] PwC's estimates of likely recoveries were between 34% and 42%, that would lead to total losses of approximately $1.3 billion out of the peak assets of $2.09 billion. [12]
In April 2023 PwC launched a series of lawsuits against Bridging's former auditor, KMPG, Bridging insiders and external borrowers implicated in the fraud cases outlined by the OSC: [13] [14]
PWC has also disclosed that they, as the receiver, are actively trying to track down "funds transferred by certain former principals of Bridging Finance to, among other jurisdictions, Liechtenstein and the Cayman Islands.” [13]
On October 29, 2024, Ontario Securities Commission (OSC) Tribunal ruled that Bridging Finance Inc. (BFI) founders David and Natasha Sharpe engaged in fraud, leading to over $1 billion in investor losses. [18]
The tribunal found that the Sharpes conflicted transactions and securities violations, including channeling millions in loans to companies tied to businessman Sean McCoshen, who paid kickbacks to the Sharpes. The tribunal also found that $40 million was used to benefit BFI and the Sharpes in a deal with Ninepoint Partners LP, and loans were also transferred to Gary Ng, who used fake collateral to buy a stake in BFI. [19]
Natasha Sharpe was also implicated in approving $32 million in loans to Gary Ng's companies, with Mr. Ng paying the Sharpes $1 million. David Sharpe received $19.5 million in kickbacks from Sean McCoshen, with $18.2 million traced to investor funds. [20]
The tribunal found the Sharpes guilty of fraud, document forgery, and misleading investigators. It further noted that David Sharpe attempted to intimidate former employees, business associates, and borrowers, while wrongfully implicating others in their fraudulent schemes. BFI’s former compliance officer Andrew Mushore was also found to have indirectly participated in the misconduct. [21]
PricewaterhouseCoopers International Limited is a multinational professional services brand of firms, operating as partnerships under the PwC brand. It is the second-largest professional services network in the world and is considered one of the Big Four accounting firms, along with Deloitte, EY, and KPMG.
Conrad Moffat Black, Baron Black of Crossharbour, is a Canadian-British writer and former politician, newspaper publisher, financier, and convicted felon.
Dalton James Patrick McGuinty Jr. is a former Canadian politician who served as the 24th premier of Ontario from 2003 to 2013. He was the first Liberal leader to win two majority governments since Mitchell Hepburn nearly 70 years earlier. In 2011, he became the first Liberal premier to secure a third consecutive term since Oliver Mowat after his party was re-elected in that year's provincial election.
Bre-X was a group of companies in Canada. Bre-X Minerals Ltd., a major part of Bre-X based in Calgary, was involved in a major gold mining scandal when it reported it was sitting on an enormous gold deposit at Busang, East Kalimantan, Indonesia. Bre-X bought the Busang site in March 1993 and in October 1995 announced significant amounts of gold had been discovered, sending its stock price soaring. Originally a penny stock, its stock price reached a peak at CAD$286.50 in May 1996 on the Toronto Stock Exchange (TSE), with a total capitalization of over CAD $6 billion. Bre-X Minerals collapsed in 1997 after the gold samples were found to be fraudulent.
Gregory Samuel Sorbara is a former politician in Ontario, Canada. He was a Liberal member of the Legislative Assembly of Ontario from 1985 to 1995, and again from 2001 to 2012 who represented ridings north of Toronto in the city of Vaughan. Sorbara served as a cabinet minister in the governments of David Peterson and Dalton McGuinty.
Garth Drabinsky is a Canadian film and theatrical producer and entrepreneur. In 2009, he was convicted and sentenced to prison for fraud and forgery. The sentence was reduced from 7 to 5 years in prison, on appeal to the Ontario Court of Appeal, and the Supreme Court of Canada declined to hear a subsequent appeal. In April 2023, a judge dismissed Drabinsky’s defamation lawsuit against American Actor’s Equity for placing him on their ‘Do Not Work’ list, and in July 2024 the 2nd Circuit Court of Appeals affirmed this dismissal, along with his claim that the union's conduct violated antitrust law. Drabinsky has attempted 3 comebacks all resulting in failure and millions of investor dollars being lost.
Michael Lee-Chin, is a Jamaican-Canadian billionaire businessman, philanthropist and the chairman and CEO of Portland Holdings Inc, a privately held investment company in Ontario, Canada.
Maple Leaf Sports & Entertainment Ltd. (MLSE) is a professional sports and commercial real estate company based in Toronto, Ontario, Canada. With assets that include franchises in four of the six major professional sports leagues in the United States and Canada, it is the largest sports and entertainment company in Canada, and one of the largest in North America.
The Live Entertainment Corporation of Canada, better known as Livent, was a theatre production company based in Toronto, Ontario. Founded in 1989 by former Cineplex Odeon executives Garth Drabinsky and Myron Gottlieb, the company initially found success with its production of The Phantom of the Opera at its Pantages Theatre in Toronto. In 1993, they brought Kiss of the Spider Woman to Broadway, winning the Tony Award for Best Musical. They became known for lavish productions with their 1994 revival of Show Boat, and their ambitious 1998 original musical Ragtime.
Wells Fargo & Company is an American multinational financial services company with a significant global presence. The company operates in 35 countries and serves over 70 million customers worldwide. It is a systemically important financial institution according to the Financial Stability Board, and is considered one of the "Big Four Banks" in the United States, alongside JPMorgan Chase, Bank of America, and Citigroup.
Corruption in Canada is the use of political power for private gain by Canadian government officials.
1Malaysia Development Berhad is an insolvent Malaysian strategic development company, wholly owned by the Minister of Finance (Incorporated).
Home Capital Group is a Canadian holding company. Through its subsidiary Home Trust Company, it provides Canadians a range of credit products including mortgages, credit cards and deposit services. It is regulated under federal legislation. Home Trust operates mainly in regions considered low risk where above average returns may be achieved; it also tends to focus on areas largely ignored by other mortgage lenders. During the 2008 economic crisis, it faced less competition and its customer base is unique. Mortgaged properties are residential and non-residential and include apartment and office buildings, hotels, construction and industrial complexes. In 2009, its stock outperformed that of eight major competitors in the uninsured mortgage market.
Jowdat Waheed is a senior Canadian mining executive and Chartered Financial Analyst. Waheed worked as Chief Executive Officer of mining company Sherritt. He resigned, for personal reasons, in 2009.
The 1Malaysia Development Berhad scandal, often referred to as the 1MDB scandal or just 1MDB, is an ongoing corruption, bribery and money laundering conspiracy in which the Malaysian sovereign wealth fund 1Malaysia Development Berhad (1MDB) was systematically embezzled, with assets diverted globally by the perpetrators of the scheme. Although it began in 2009 in Malaysia, the scandal's global scope implicated institutions and individuals in politics, banking, and entertainment, and led to criminal investigations in a number of nations. The 1MDB scandal has been described as "one of the world's greatest financial scandals" and declared by the United States Department of Justice as the "largest kleptocracy case to date" in 2016.
Edward Sawiris Banayoti, formerly known as Ernest (Ernie) Anderson and Ashraf Banayoti, is a businessman of Egyptian origin based in Canada.
CI Financial is a Canadian investment management company based in Toronto, Ontario. It offers investment management and wealth management services targeted to high net worth retail investors, as well as brokerage and trading services to portfolio managers and institutional investors.
The Alaska-Alberta Railway Development Corporation was an entity created to build, own, and operate a proposed 2,600-kilometre (1,600 mi) railroad between Delta Junction, Alaska, and Fort McMurray, Alberta. The concept never got beyond the planning stage and in 2021, the company was put in receivership. The project was on hold due to financial irregularities between A2A's only shareholder, Sean McCoshen, and A2A's main financial backer Bridging Finance Inc. At the time of the receivership filing, the railroad was still in a conceptual stage and the only assets identified by the receiver were consulting reports and intellectual property. Total debts owed to Bridging Finance were approximately $212.9 million. McCoshen filed for personal bankruptcy in Oregon two months after A2A entered receivership.
PACE Savings & Credit Union Limited was a Canadian credit union based in Ontario. Pace grew through consolidation of several smaller credit unions in Ontario but the company was placed under administration by Financial Services Regulatory Authority of Ontario (FSRA) in September 2018 after the regulator found evidence of civil fraud, potential self-dealing by the CEO Larry Smith, and poor governance practices. After leaving administration in January 2020, the credit union went into administration again in November 2020 after the new CEO and several recently appointed directors resigned following the disclosure of additional regulatory problems at subsidiary Pace Securities Corp.
Ng Yu Zhi, also known as Ng You Zhi, is a Singaporean alleged con artist and fraudster. The former director of Envy Global Trading, he was charged in March 2021 with running the largest Ponzi scheme in the history of Singapore, worth about S$1.5 billion.