Skip to main content

David Sharpe, the former CEO of Bridging Finance Inc., is seeking to shut down the Ontario Securities Commission investigation of the company, arguing the OSC improperly disclosed the transcript of his interview with the regulator.

Mr. Sharpe has filed an application seeking an order to quash an investigation by OSC enforcement staff and bar the regulator from using evidence it obtained from the interview. He also wants the transcript removed from the website of Bridging Finance’s receiver.

The application argues the OSC compelled him to sit for an interview over three sessions, ending on April 29, and the summons referenced the confidentiality provisions of Ontario’s Securities Act, which say no one can disclose the name of any person examined or any testimony given. Mr. Sharpe said he expected privacy and confidentiality with respect to his testimony as a result.

However, he said, the OSC filed various documents in court on April 30 that included excerpts of the transcript or featured it in its entirety, then posted it publicly on the website of Bridging Finance’s court-appointed receiver, PricewaterhouseCoopers. The Globe and Mail published an article on May 3 that quoted some of his testimony. Mr. Sharpe said the article is “highly prejudicial.”

The confidentiality provisions of the Securities Act include an exemption allowing disclosure if the OSC “considers that it would be in the public interest.” However, Mr. Sharpe claims OSC staff did not obtain an order from the regulator’s commissioners authorizing it to disclose the interview transcript. He said he was given no warning nor opportunity to oppose the disclosure.

Bridging Finance’s largest borrower to file for creditor protection, owes $208-million to the private lender

Bridging Finance’s missing man: Who is Sean McCoshen, the dealmaker tied up in the private lender’s fall?

The OSC has not launched a regulatory case against Mr. Sharpe, but it has alleged in court filings related to the receivership that Bridging Finance misappropriated $35-million from an investment fund it manages to complete an acquisition for its own benefit; that Mr. Sharpe received $19.5-million in his personal chequing account from a client to whom Bridging had lent more than $100-million; and that Bridging lent $32-million to a client two weeks before the same client bought a 50-per-cent stake in Bridging.

Those transactions constitute “serious misconduct and breaches of Ontario securities law,” the OSC alleged, adding that Bridging and “certain members of its senior management have failed to deal fairly, honestly and in good faith with the investors” in its funds.

In an early May interview with The Globe, Mr. Sharpe admitted his company needed to beef up its investor disclosures, but he said he was mystified by the move to put his company under the control of a receiver. The undisclosed payments are actually loans, he said. “We are stunned by this.”

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Report an error

Editorial code of conduct