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Sanford Riley, former board chair at Manitoba Hydro, speaks to reporters after a speech to business leaders in Winnipeg on Dec. 1, 2017. Mr. Riley is facing allegations of sexual harassment, according to a lawsuit.The Globe and Mail

Sandy Riley, a prominent Winnipeg-based businessman and chief executive of Richardson Financial Group Ltd., is facing allegations of sexual harassment from the co-founder and CEO of a startup he invested in, according to a lawsuit.

Susan Bonk co-founded Precision Weather Solutions Inc. in 2013, hoping to improve agricultural yields through technology that provided better weather-pattern and soil measurements. Mr. Riley invested $500,000 in PWS’s parent company, Galton Corp., through two financing rounds and became chair of Galton’s board of directors.

In a lawsuit filed in Manitoba’s Court of King’s Bench, Ms. Bonk alleges that Mr. Riley’s dual position as a major investor as well as Galton’s board chair gave him a special position of power and authority over her. When she rejected his advances, she alleges, he retaliated by engaging in a course of bullying and harassment that included trying to get her fired as CEO.

Ms. Bonk is also suing three other Galton board directors: Charles Loewen, whose family founded Loewen Windows and Doors; William Watchorn, a Winnipeg financier; and Robert Silver, whose family founded the company that makes Silver jeans and who also co-owns the Winnipeg Free Press. The three men are being sued for negligence and breaches of their fiduciary duties.

Ms. Bonk initially filed her lawsuit in January, 2022, with no legal counsel. An amended lawsuit was filed in August and she is now represented by Gillian Hnatiw, a leading sexual-harassment lawyer based in Toronto. None of the allegations have been tested in court.

In a joint statement of defence filed in court, Mr. Riley categorically and fully denied any sort of sexual harassment, intimidation, assault or battery toward Ms. Bonk, and he denied ever making any sexually charged comments or advances. He also argued that all of his dealings with Ms. Bonk “were appropriate and professional, and while at times involved social talk, were largely focused on business matters and the operations of Galton and PWS.”

Mr. Loewen, Mr. Watchorn and Mr. Silver all deny ever knowing about Mr. Riley’s alleged behaviour.

As chief executive of Richardson Financial Group and a board member of Richardson Wealth, Mr. Riley is a long-standing company representative for the affluent Richardson family. He currently sits on the board for Molson Coors Beverage Company and was recently appointed chair of the board of directors for CPI Card Group Inc., a payment technology company.

Mr. Riley has previously been CEO of Investors Group, chair of Manitoba Hydro, chancellor of the University of Winnipeg, and he is a member of the Order of Canada.

Mr. Riley initially invested in Galton/PWS in December, 2015, and Ms. Bonk alleges that soon after, he sought out regular meetings with her, often at a restaurant for dinner or drinks. Ms. Bonk alleged that Mr. Riley began making sexually charged comments about her appearance, and frequently inquired about whether she was dating anyone. She alleged the advances grew more serious over time.

In one instance, around December, 2016, Ms. Bonk alleges that Mr. Riley invited her to dinner to catch up on the business, and he insisted on picking her up. Once she was with him, he told her he wanted to show her his house and art collection before dinner.

At his house, Mr. Riley allegedly served some wine, suggested they look around upstairs and insisted they order dinner in. Ms. Bonk eventually called a taxi, but when she went to leave, Mr. Riley allegedly stood in the doorway, grabbed her arm and pulled her close, forcing Ms. Bonk to pull her arm away as hard as she could and say “no.”

Despite growing uncomfortable, Ms. Bonk alleges that she “felt dependent on Mr. Riley – a prominent and powerful member of the Manitoba community – and knew she needed to remain in his good graces to raise additional capital, which is typical for growing technology companies,” according to the lawsuit.

In another instance cited in the lawsuit, Mr. Riley allegedly insisted in early 2017 that Ms. Bonk accompany him on a two-hour trip to Lake of the Woods, a summer destination for wealthy Winnipeggers, where Mr. Riley owns a cottage and is a member of the local yacht club, to scout a possible site for a PWS weather station.

On the trip, Ms. Bonk alleges, Mr. Riley spent the day driving around to various cottages rather than scouting a location and on the way back to Ms. Bonk’s Winnipeg condo he insisted on going up for a drink.

Ms. Bonk alleges that Mr. Riley stayed for hours, made sexual comments, touched her in various ways and asked to see her bedroom. Eventually, she alleges, he told her he was interested in a relationship with her. Ms. Bonk allegedly told him she was not interested and that it would be professionally inappropriate for them to get involved.

In the joint statement of defence, Mr. Riley acknowledged that a trip to Lake of the Woods took place, but he alleged it was requested by Ms. Bonk, and he disputed the timeline. He argued it happened in March, 2015, prior to his investment, not in 2017, as she alleged.

In the same statement of defence, he also alleged that he first met Ms. Bonk in late 2013 and that through 2014 and 2015, he “was away from Winnipeg on business and travel and so only had sporadic conversations with [Ms.] Bonk.”

Asked if Mr. Riley ever visited Ms. Bonk’s condo, his lawyers at Tapper Cuddy LLP in Winnipeg told The Globe and Mail that they had no comment because the matter is before the courts. They also said the statement of defence denies all allegations contained in the lawsuit.

Ms. Bonk alleges that Mr. Riley turned on her shortly after the condo incident. The pair met for breakfast, the lawsuit alleges, and Mr. Riley suggested that some of his comments the prior evening may have made Ms. Bonk uncomfortable. She said they had, and she stressed that their relationship needed to remain professional.

“To her surprise,” the lawsuit alleges, “Mr. Riley responded by renewing his sexual overtures, telling her that what he felt for her was more than just a crush and assuring her that PWS’s investors would understand.” (By this point, PWS had borrowed $3.45-million from a group of backers assembled largely by Mr. Riley.)

Ms. Bonk alleges that she hit a mental breaking point and told Mr. Riley that she did not find him attractive, that she had no interest in getting involved with him, and that his behaviour needed to stop. “She vowed to never be alone with him again,” the lawsuit alleges.

From there, Ms. Bonk alleges, Mr. Riley “became increasingly irritated” by her efforts to limit in-person contact and began complaining about her to the board of directors and other investors, including telling them that she refused to share financial information with him and that he had grave concerns about the financial management of the company.

In July, 2017, Mr. Riley asked Ms. Bonk for a dinner to discuss PWS, and she agreed to meet, according to the lawsuit. Over the course of the meal, the lawsuit alleges, Ms. Bonk felt his intent was simply to bully and belittle her, and she left the restaurant before she finished eating.

Roughly a week later, Mr. Riley sent her what she described as a “long, lecturing e-mail” and also sent a copy to the rest of Galton’s board and to other investors. At a board meeting in September, 2017, Mr. Riley attempted to get Ms. Bonk replaced as CEO, according to the lawsuit.

Ms. Bonk is suing three directors because she alleges that they were aware of Mr. Riley’s alleged sexual harassment and did nothing about it.

Ms. Bonk alleges that she met with Mr. Loewen, who chaired the human-resources committee, and described Mr. Riley’s alleged sexual harassment “in some detail.” She alleges that Mr. Loewen told her that Mr. Riley had done the same thing to another woman he met through his work with the Winnipeg Art Gallery Foundation or the University of Winnipeg Foundation.

“However,” the lawsuit alleges, “when Susan explicitly sought his assistance, Loewen said that Riley was a significant shareholder in Loewen Windows and that he could not risk Riley getting upset with him.”

Ms. Bonk alleges that she also had some conversations of this nature with Mr. Watchorn and Mr. Silver, the other directors, albeit in less detail.

In the joint statement of defence, Mr. Loewen denied that Ms. Bonk ever disclosed to him that Mr. Riley was or had allegedly sexually harassed her, and he “categorically denies” he ever stated anything about knowing of a prior sexual-harassment allegation involving Mr. Riley.

In the same defence statement, he alleged that at some point Ms. Bonk “indicated in a threatening manner that she could always make a complaint of harassment or sexual harassment against other individuals and Mr. Loewen indicated it was always her right to make such a complaint or by going to the Human Rights Commission.”

Mr. Watchorn and Mr. Silver, the other directors, deny Ms. Bonk ever disclosed that Mr. Riley was allegedly sexually harassing or intimidating her.

Galton, PWS and Ms. Bonk are currently entangled in multiple lawsuits. In 2019, the bond investors who lent $3.45-million tried to put PWS into bankruptcy protection. Around this time, one of the individual lenders, David Asper, the son of Canwest Global Communications founder Izzy Asper, filed his own lawsuit to argue that PWS had defaulted on its debt.

In November, 2020, Chief Justice Glenn Joyal of the Court of King’s Bench of Manitoba ruled that terms of the debt financing required PWS/Galton to provide audited financial statements to the new investors within 120 days of the company’s Dec. 31 fiscal year end. In 2017, those financials were supposed to be provided by the end of April, a few months before the dinner and e-mail in July, but they weren’t.

The judge also explained that unaudited financials provided to potential bond investors before the financing showed PWS making a $600,000 profit in 2015, but subsequent financial reports showed PWS reporting losses of $2-million in both 2016 and 2017.

The company’s statement of operations showed significantly more was spent on product development, professional fees and salaries and benefits in 2017 compared with 2016. Ms. Bonk was questioned at her cross-examination about this change “but refused to answer the question, claiming the information is not relevant,” according to the ruling.

At least three lawsuits involving Galton and PWS – some as defendant, some as plaintiff – are still working their way through the courts, including a pivotal one with a former customer. PWS is still in business, but its operations are largely dormant until the lawsuits are resolved.

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