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Bridging Finance's court-appointed receiver says 'significant number' of emails intentionally deleted

Financial Post logo Financial Post 2021-06-10 Barbara Shecter
graphical user interface, text: A Toronto Police Services officer at the Ontario Securities Commission. © Provided by Financial Post A Toronto Police Services officer at the Ontario Securities Commission.

The court-appointed receiver that took over the operations of Canadian investment manager Bridging Finance Inc. after Ontario regulations found questionable related-party transactions and movement of funds to personal bank accounts told unit holders Wednesday it has discovered that “a significant number” of emails appear to have been intentionally deleted.

In a letter sent to unit holders, PriceWaterhouseCoopers Inc. describes “intentional and targeted” deletions from Bridging’s email platform, beginning in October of 2020, and says its forensics team is working to recover the deleted messages.

Toronto-based Bridging Finance, which raises capital from investors to make loans to corporate borrowers in exchange for limited partnership units, was put into court-approved receivership last month while the Ontario Securities Commission continues its investigation.

According to documents filed in court, enforcement staff of the OSC went to court to ask that the company with $2 billion in assets under management be put into receivership after its investigation “uncovered evidence that BFI (Bridging) and certain members of its senior management team… appropriated amounts from the BFI Funds for personal gain.”


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In addition, the investigators alleged BFI funds had been mismanaged, with “material” conflicts of interest not disclosed, that securities laws had been breached, and that OSC enforcement staff had been misled.

In an unusual twist, David Sharpe, who was chief executive and one of the main operators of Bridging Finance, is a former mutual fund regulator. Once the receiver took over, his employment with Bridging was terminated, according to court filings.

The OSC’s initial investigation focused on a series of transactions between 2017 and 2020, and potential conflicts of interest arising from the relationship between the firm, certain directors, officers and shareholders and the principals of some of the loan counterparties.

In seeking the receivership, the OSC alleged that under Sharpe’s direction “BFI misappropriated approximately $35 million from the BFI Funds to complete an acquisition for its own benefit.”

In addition, the court filings alleged Sharpe received approximately $19.5 million in undisclosed payments in his personal chequing account from a company that was controlled by a person whose other firms BFI had loaned more than $100 million.

None of the allegations have been proven.

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