David and Natasha Sharpe at the Bridging Finance Toronto offices in 2019. The husband and wife were found guilty of investment fraud last year.Fred Lum
Ontario’s securities regulator said it has filed applications seeking to force David and Natasha Sharpe into bankruptcy and appoint a trustee over their assets, after the husband-and-wife team who once ran Bridging Finance Inc. failed to pay millions of dollars in sanctions.
The Ontario Capital Markets Tribunal, an independent division of the Ontario Securities Commission, in June ordered Mr. and Ms. Sharpe to pay more than $27-million for their role in defrauding investors.
That figure includes $20.8-million to be returned to investors through what’s known as a disgorgement order, as well as more than $5.5-million of administrative penalties.
The tribunal found the Sharpes guilty of fraud in October, 2024, alongside Bridging’s former chief compliance officer, Andrew Mushore. Mr. Sharpe was Bridging’s chief executive officer and Ms. Sharpe was its chief investment officer.
The tribunal found that the Sharpes had perpetrated or participated in three separate securities frauds that diverted more than $100-million of investor funds, affecting more than 26,000 investors.
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The OSC said in a press release Wednesday that the Sharpes have appealed the tribunal’s decisions and that those appeals will “proceed to a hearing in the normal course.”
Lawyers for the pair did not immediately respond to a request for comment.
Bridging was once one of Canada’s largest private lenders, managing more than $2-billion of funds that were available to retail investors through the country’s largest banks and brokerage companies.
It specialized in making short-term loans – typically no longer than three years – to high-risk borrowers in exchange for high-interest payments. Bridging was put under a court-ordered receivership in April, 2021.
A lengthy investigation by the OSC determined that the Sharpes had orchestrated a multimillion-dollar fraud against their investors, including by accepting kickback payments from a major borrower and by authorizing a $40-million loan to another Bridging client before transferring the money to themselves.
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Last month, Bridging’s receiver, PricewaterhouseCoopers Inc., sued the company’s former auditor, Ernst & Young LLP, for $1.4-billion for failing to catch signs of fraud at the company.
An EY spokesperson previously told The Globe that the auditor stands behind the “quality and integrity” of its work as Bridging’s auditor and would be responding to the allegations through the appropriate legal channels.
PwC filed the lawsuit against EY more than two years after launching a similar one against KPMG LLP, which audited other Bridging funds. KPMG argued in its statement of defence that EY was the auditor for the majority of Bridging’s funds, as well as for Bridging itself, and that KPMG was “consistently lied to” by the lender’s management.