A panel of the Ontario Capital Markets Tribunal has found the former top executives of Bridging Finance Inc., David Sharpe and Natasha Sharpe, liable for perpetrating a series of brazen, multi-million dollar frauds that systematically diverted investor money for their own personal enrichment. The tribunal’s sweeping decision, cited as Bridging Finance Inc (Re), 2024 ONCMT 23 (CanLII), released on October 28, 2024, details how the husband-and-wife duo orchestrated complex schemes involving kickbacks, undisclosed self-dealing, and falsified documents, while the firm’s chief compliance officer, Andrew Mushore, was found to have participated in one of the frauds and actively helped conceal another.
The tribunal’s reasons paint a vivid picture of a corporate leadership that repeatedly placed its own financial interests ahead of its duty to investors. The misconduct centered on three distinct sets of transactions that ultimately saw tens of millions of dollars siphoned from Bridging’s investment funds. In 2021, these concerns led the Ontario Securities Commission to seek a court-appointed receiver to take control of the firm and its more than $2 billion in assets under management. David Sharpe, the firm’s former chief executive officer, did not participate in the tribunal hearing, while Natasha Sharpe, the former chief investment officer, and Andrew Mushore, the former chief compliance officer, contested the allegations against them.
The first scheme involved a massive kickback arrangement connected to loans made to companies associated with Winnipeg businessman Sean McCoshen. Bridging had extended over $150 million in loans to McCoshen’s Alaska-Alberta Railway Development Corporation and over $115 million to Peguis First Nation, a community McCoshen had introduced to the firm. The tribunal found that between 2016 and 2019, David Sharpe personally received approximately $19.5 million in payments from a McCoshen-controlled numbered company. The tribunal determined that at least $18.2 million of this amount was investor money, as the payments to Sharpe were made almost immediately after Bridging advanced loan funds to McCoshen’s company. In one particularly telling instance, Bridging advanced a $10 million loan to a company called Growforce Holdings Inc., which had no apparent connection to McCoshen. However, McCoshen personally guaranteed the loan, and the funds were transferred not to Growforce, but to his numbered company. The very next day, that company paid David Sharpe $5 million. The tribunal found these funds were used for personal expenses, including transfers to trusts for the Sharpes, deposits to an offshore account, home renovations, luxury cars, and artwork.
Natasha Sharpe was also found to have participated in this fraud. In October 2017, she received a direct payment of $250,000 from the same McCoshen company into her personal bank account. The tribunal noted this was a clear outlier among the handful of deposits made to her account that year and that, as a senior officer, she knew or ought to have known about the fraudulent kickback scheme being perpetrated by her husband, particularly as she continued to approve loans to McCoshen’s entities after receiving the payment.
The second fraud detailed by the tribunal involved Bridging’s 2018 acquisition of a management interest in one of its own funds from Ninepoint Partners LP for $45 million. Unable to secure outside financing, the Sharpes engineered a deceptive scheme to use money from their own investors. They approached Rishi Gautam, a businessman whose companies were already significant Bridging borrowers, and arranged for the Bridging Mid-Market Debt Fund to lend $40 million to Gautam’s companies. The loan documents, which Andrew Mushore helped prepare, falsely stated the funds were for the “working capital needs” of Gautam’s business. In reality, the plan was to immediately route the money back to Bridging to fund its acquisition from Ninepoint.
The tribunal found the approval process for this loan was a sham. Key information was withheld from Bridging’s Credit Committee, and the tribunal found that meeting minutes purporting to document a discussion of the transaction were a fiction created after the fact. When the committee’s only independent member, Dennis McCluskey, raised concerns about a conflict of interest, David Sharpe falsely assured him that Bridging had obtained a legal opinion from a major national law firm supporting the transaction. The tribunal found no evidence such an opinion ever existed. Ultimately, the loan proceeds were transferred from the Mid-Market Fund directly to Ninepoint’s lawyers to close the purchase, with Gautam’s companies serving as little more than a smokescreen. The deception continued a year later when Bridging refinanced the debt; a payout statement was created that bore an unauthorized copy of Gautam’s signature to maintain the false appearance that his company had been the lender. The tribunal found David and Natasha Sharpe perpetrated this fraud, while Mushore participated by helping to prepare the misleading documentation.
The third fraudulent scheme involved loans made to companies controlled by businessman Gary Ng, who acquired a 50% stake in Bridging in 2019. The tribunal found Natasha Sharpe orchestrated these transactions to facilitate Ng’s purchase, from which she personally benefited by selling her shares to him for $16.6 million. In June 2019, just before Ng’s purchase closed, the Sharpes directed a Bridging portfolio manager to urgently process a $32 million loan to an Ng-controlled company. The purpose of the loan was concealed from the Credit Committee, due diligence was brushed aside, and Ng’s name was deliberately omitted from the loan submission. Three committee members, including Mushore, withheld their approval due to conflict of interest concerns, but the loan was funded anyway. Three days before the deal closed, $30 million from that loan was transferred into the company Ng used for the acquisition.
Just weeks after Ng became Bridging’s largest shareholder, he requested another $35 million. The tribunal found that this second advance was made without any Credit Committee approval at all. To cover this up, Natasha Sharpe directed staff to alter the original loan documents to falsely suggest the additional $35 million was an “option to draw” that had been approved from the outset. The tribunal accepted testimony that when a portfolio manager refused to alter the documents, Natasha Sharpe typed the changes herself. This misconduct was compounded by payments of $500,000 each to David and Natasha Sharpe from Ng in November 2019 and by false statements in the funds’ audited financial statements, which concealed the true nature of the loans.
Beyond the three core frauds, the tribunal found the respondents engaged in a concerted effort to obstruct the OSC’s investigation. The Sharpes were found to have repeatedly provided false and misleading answers during their compelled examinations. The tribunal also found that David Sharpe directed a massive deletion of approximately 34,200 emails using search terms like “Gary Ng” and “River cities” to hide evidence. He also instructed staff, including Mushore, to alter loan documents and schedules before producing them to investigators to hide the Ninepoint loans and misrepresent the recipients of the McCoshen loan proceeds. Furthermore, the tribunal found that David Sharpe engaged in witness intimidation, sending profane and threatening text messages and voicemails to former Bridging employees who were cooperating with the receiver. In a final act of obstruction, Natasha Sharpe was found to have illegally allowed David Sharpe to secretly listen in on her compelled telephone examination with OSC investigators, conferring with him during breaks.
The tribunal concluded that David and Natasha Sharpe contravened securities law by perpetrating all three frauds and by obstructing the investigation. Andrew Mushore was found to have contravened the law by participating in the Ninepoint fraud and for his role in altering records to cover up the Ng loans. A separate hearing will be scheduled to determine the appropriate sanctions and costs against the three individuals.
