Latest news with #BridgingFinance
Yahoo
7 days ago
- Business
- Yahoo
Ernst & Young faces $1.4bn Bridging Finance lawsuit
Ernst & Young is facing a $1.4bn lawsuit over claims that it failed to detect fraudulent activities and misstatements leading to the downfall of Toronto-based private lender Bridging Finance, reported Bloomberg. The legal action, initiated by the company's receiver PricewaterhouseCoopers (PwC), was filed with Ontario's Superior Court last month. According to the claim, Ernst & Young provided unqualified opinions on Bridging's financial statements from 2014 to 2020, despite apparent warning signs such as overvalued assets and concealed loan defaults. Bridging, which managed more than $2bn at its height, specialised in high-risk loans to clients unable to secure funding from conventional banks. PwC, appointed by the Ontario Securities Commission in 2021 to oversee Bridging due to concerns of investor fund misuse, alleges that the lender's executives, David Sharpe and Natasha Sharpe, engaged in deceptive accounting practices. These practices purportedly inflated the net asset value of the funds, leading to the collection of unwarranted fees. The Sharpe couple was adjudged by Ontario's Capital Markets Tribunal, in what was said to be 'one of the most grievous' cases, to have committed fraud and obstructed regulatory investigations, with David Sharpe receiving a permanent ban from the province's capital markets last month. The receiver's lawsuit also accuses Ernst & Young of neglecting to properly scrutinise Bridging's use of payment-in-kind loans and the misclassification of loan risks. Ernst & Young is stated to have said: "At EY Canada, we take our role and responsibilities as auditors very seriously, and stand behind the quality and integrity of our historical work as auditor for Bridging Finance Inc." Ernst & Young added that it plans to address the allegations through the courts, Bloomberg reported. PwC did not reply to requests for comment. As of 31 October 2024, PwC has managed to recover approximately $698m, with an Ontario court authorising an initial distribution of $321m to unitholders in April 2025. The receiver estimates potential recoveries could reach around $880m. The case, which has impacted more than 26,000 investors, was first reported by the Globe and Mail newspaper, Bloomberg reported. "Ernst & Young faces $1.4bn Bridging Finance lawsuit" was originally created and published by International Accounting Bulletin, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Bloomberg
08-07-2025
- Business
- Bloomberg
Credit Fund's Collapse Leads to $1 Billion Lawsuit Against EY
Bridging Finance Inc. 's receiver is suing Ernst & Young LLP for C$1.4 billion ($1 billion), alleging the auditor failed to detect fraud and misstatements that contributed to the Toronto private lender's collapse. In a claim filed with Ontario's Superior Court last month, PricewaterhouseCoopers alleged that EY issued unqualified opinions on Bridging's books from 2014 to 2020 despite red flags, including inflated asset values and hidden defaults.
Globe and Mail
20-06-2025
- Business
- Globe and Mail
Business Brief: Canada's great population adjustment
Good morning. A monumental economic issue in Canada that has been overshadowed by the trade war is the reshaping of Canada's immigration system. After an influx of temporary residents flooded labour markets and sent rents soaring, cuts to immigration rates are taking effect. In fact, Canada's population is now growing at the slowest pace in a decade, outside of the COVID-19 pandemic. More on that below. But first, today's headlines: Energy: Saskatchewan is extending the life of its coal-fired power plants, saying Ottawa has no jurisdiction to stop it. Rates: The Federal Reserve held interest rates steady yesterday and slowed the overall pace of expected future rate cuts in the face of the Trump administration's tariff plans Regulation: Convicted husband and wife fraudsters David and Natasha Sharpe must pay more than $27-million for their role in the Bridging Finance Inc. investment scheme, the Ontario Capital Markets Tribunal ruled For reasons that have never been entirely made sense, the Trudeau government dispensed with Canada's enviable immigration system and opened the door to a torrent of temporary workers and international students. In 2023 alone, Canada added 1.3 million people, which represented the highest rate of population growth since the 1950s. After the strains on infrastructure, housing and social services became apparent, the government set out a plan to course-correct the system. Prime Minister Mark Carney now aims to reduce immigration to 'sustainable levels' by capping the total number of temporary workers and international students at less than 5 per cent of Canada's population by the end of 2027. Those policy changes are starting to bring about some major demographic shifts. The national population was essentially flat in the first quarter, with growth of 0.05 per cent clocking in as the slowest non-pandemic reading since 2015. In a country with low birth rates that has long relied on immigration as an economic stimulant, these policy changes are bound to have some major knock-on effects throughout the Canadian economy. I discussed some of the moving parts with Robert Kavcic, senior economist at Bank of Montreal. You frame this as one of the biggest economic stories in Canada right now. Why? It's just a major policy change that touches on a lot of the issues that policymakers have been trying to figure out for a long time, like rent, inflation, affordability. Population growth is at the root of a lot of that. How much did immigration policies contribute to these problems? The population explosion we had put too much demand in a short amount of time that we couldn't match on the supply side. The rental market was extremely tight, and the minute somebody steps foot in Canada, they need a place to stay. But it takes years to actually put that supply through the pipeline. Same thing with transportation. It's very inflationary in the short run until we can build out to meet that demand. You also see Canada's productivity problems as linked, correct? I don't think it's a coincidence that as non-permanent resident inflows exploded, the productivity numbers really fell off. On an economy-wide basis, there was just more leaning on low-cost labour at the expense of capital investment. It doesn't speak to our long-standing productivity underperformance. It just made it a lot worse over the last two or three years. How much does Canada rely on immigration to shore up our economy? Very much. The labor supply pipeline that it brings in is absolutely necessary because Canadians don't really have babies anymore. It's just part of the system went off the rails. Is this a tough time to undergo such a big demographic adjustment while the Canadian economy is under such pressure? The question we got a lot is: Is the economy going to fall into recession because you're cutting population growth to zero? No, because you're taking a lot of stress off of things like service and rental inflation. That is going to allow the Bank of Canada to cut interest rates, which is a tide that lifts the whole economy. I think this actually rebalances the economy and makes it healthier. We're seeing rents come down, which is good for affordability, but is that going to deter investment in new housing units? I think so. We will see construction back off now. Toronto is probably ground zero of this where rents are falling and pre-construction activity is basically non-existent. Are there other pressure points? There are pockets of the economy that are going to feel it. Stuff like telecom subscriptions, university enrollment. It's just going to take some time to get the system back to normal. This interview has been edited for length and clarity The publicly traded company is a species in long-term decline. Since 2002, the number of operating companies listed on the Toronto Stock Exchange has declined by more than 40 per cent – a problem that has been masked by the boom in exchange-traded funds. Who's to blame? The big banks, according to finance professor J. Ari Pandes and Senator Colin Deacon. Pensions: The decline of the defined benefit pension has hit men hardest. Savings: For many Canadians, a rainy day looms. How to make an emergency fund work for you. Investing: Four tricks to help you keep your composure when financial markets turn ugly. Global stocks slid while investors took cover in safe havens as financial markets were on edge over the possible entry of the United States into the week-old Israel-Iran air war. TSX futures edged lower, while U.S. markets were closed for the Juneteenth holiday. Overseas, the pan-European STOXX 600 was down 0.3 per cent in morning trading. Britain's FTSE 100 fell 0.29 per cent, Germany's DAX dropped 0.3 per cent and France's CAC 40 gave back 0.6 per cent. In Asia, Japan's Nikkei closed 1.02 per cent lower, while Hong Kong's Hang Seng tumbled almost 2 per cent. The Canadian dollar traded at 72.91 U.S. cents.
Bloomberg
18-06-2025
- Business
- Bloomberg
Bridging Finance Executives Receive Fines, Bans in Ontario Fraud Case
Markets By Save David and Natasha Sharpe, the husband-and-wife team found to have committed fraud at private lender Bridging Finance Inc., were fined and ordered by Canada's top securities regulator to repay more than C$20 million ($14.6 million). David Sharpe, who was Bridging's chief executive officer, was permanently banned from working or trading in the capital markets in Ontario, while Natasha Sharpe will be allowed to trade in some personal accounts if she meets the penalties and repayment obligations outlined in the decision by Ontario's Capital Markets Tribunal.
