Sharpe v. Ontario Securities Commission, 2026 ONSC 1394

DIVISIONAL COURT FILE NOS.: 581/25 and 583/25 DATE: 20260512

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

Matheson, O’Brien and Mandhane JJ.

BETWEEN:

DAVID SHARPE and NATASHA SHARPE

Appellants

– and –

CHIEF EXECUTIVE OF THE ONTARIO

SECURITIES COMMISSION

Respondent

Brian H. Greenspan, Naomi M. Lutes, Alexandra Grishanova and Nicolas M. Rouleau, for the Appellant David Sharpe

Lawrence E. Thacker, Jonathan Chen and Julien Sicco, for the Appellant Natasha Sharpe

Mark Bailey, Adam Gotfried and Susan Kimani, for the Ontario Securities Commission

Ryan Cookson and Sean Hanley, for the Attorney General of Ontario

HEARD at Toronto: March 11-12, 2026

REASONS FOR DECISION

Matheson J.:

[1] David Sharpe and Natasha Sharpe have appealed to this Court challenging decisions of the Capital Markets Tribunal.[^1] They advance overlapping grounds for their appeals. The Attorney General appeared because at an earlier stage a notice of constitutional question had been delivered. However, it was not addressed in the factums. At the outset of the hearing, the appellants confirmed that the proposed constitutional issue was not being pursued.

[2] By decision dated October 28, 2024 (the Merits Decision), the Tribunal concluded that each of the appellants perpetrated a fraud in contravention of the Securities Act, R.S.O. 1990, c. S.5, among other breaches of the Securities Act. The Merits Decision is not directly challenged on the appeals.

[3] By decision dated June 17, 2025 (the Sanctions Decision), the Tribunal imposed cease trade and other orders on the appellants, which include orders requiring disgorgement of about $18 million (for David Sharpe) and $750,000 (for Natasha Sharpe), and an additional $2 million for which they were found jointly and severally liable. Natasha challenges that $2 million disgorgement order, as against her, in her appeal. The other sanctions are not directly challenged.

[4] The main grounds of appeal arise from the dismissal of the Sharpes’ stay motions and related requests to produce documents for use in their stay motions. The stay motions were brought before the merits hearing took place.

[5] In their stay motions, the appellants alleged that the Commission proceedings against them were an abuse of process because of the Commission’s unlawful disclosure of their compelled evidence, which was given in examinations during an investigation under s. 11 of the Securities Act. The compelled testimony was disclosed in the Commission’s application for a receivership in the Superior Court in 2021, arising from the s. 11 investigation. The Tribunal later found that a disclosure order was required, which had not been obtained. The appellants rely on these grounds to request a stay of the Commission proceedings altogether, including the sanctions against them.

[6] For the reasons set out below, I would dismiss the appeals subject only to a correction in one monetary figure in the sanction challenged by Natasha Sharpe.

Background

[7] David Sharpe was the Chief Executive Officer of Bridging Finance Inc. Natasha Sharpe was the Chief Investment Officer. They are spouses. Bridging Finance Inc. set up and managed various funds as investment vehicles.

[8] Beginning in 2020, the Commission investigated Bridging Finance under s. 11 of the Securities Act and conducted examinations of the Sharpes under s. 13 of the Securities Act. There is no issue that s. 13 examinations are compelled examinations that are subject to substantial statutory non-disclosure obligations under s. 16 of the Securities Act and that there are exceptions to those obligations in s. 17 of the Securities Act.

[9] On April 30, 2021, the Commission issued a temporary cease trade order regarding the securities of certain Bridging-controlled investment vehicles. The same day, the Commission brought an ex parte receivership application regarding Bridging Finance and associated entities in the Superior Court under s. 129 of the Securities Act. The materials filed with the Superior Court included compelled evidence from the Sharpes. The receivership order was granted the same day and included an order that the receiver create a website on which the court materials would be publicly available. The receiver did so. The Commission published a news release the next day, including a link to that website.

[10] Immediately, there was widespread press coverage that included references to the compelled evidence.

[11] At the time of the receivership application, s. 17 of the Securities Act provided that disclosure of compelled testimony may be made in certain circumstances, including pursuant to an order of the Tribunal or by a s. 11 investigator in connection with existing or contemplated proceedings before the Tribunal or before certain designated Commission staff members. Before the receivership application, the Legislature passed a change to s. 17 that further expanded the s. 17 exceptions, but it was not in force at the time the Commission filed the compelled evidence in court in the receivership application.

[12] On May 7, 2021, on notice, Commission Staff sought an extension of the temporary cease trading order and receivership order at the Commission.

[13] Counsel to David Sharpe raised the disclosure issue with Staff in email in early May 2021. Staff took the position that disclosure was permitted under s. 17 of the Securities Act without obtaining a disclosure order from the Tribunal. That position was maintained until the issue was determined in 2022.

[14] David Sharpe disagreed with the Staff position. In September 2021, he sought an order from the Tribunal revoking the s. 11 investigation order because the Commission wrongly disclosed his compelled testimony in two ways: in its application to the Superior Court seeking the appointment of a receiver over Bridging Finance, and by publishing the news release.

[15] In September 2021, David Sharpe also brought a motion and application at the Commission, seeking an order that the records in the Commission’s cease-trading proceedings be kept confidential. A similar request was not made in the Superior Court receivership proceedings. The cease-trading record at the Commission was not made public until November 2022.[^2]

[16] The Tribunal released its order denying the motion to revoke the s. 11 investigation order on March 25, 2022 (the Unlawful Disclosure Decision[^3]). The reasons for decision were released to the parties on March 30, 2022, with notice that they would be released to the public the next day. The Tribunal concluded that the disclosure was not permitted without an order. However, the request to revoke the s. 11 order was denied because the unauthorized disclosure did not affect the legality or appropriateness of the s. 11 order.

[17] On March 31, 2022, Commission Staff commenced enforcement proceedings against the Sharpes as well as the Chief Compliance Officer of Bridging Finance. Staff alleged that there were three separate frauds, as well as violations of provisions of the Ontario securities law regarding conflicts of interest, false statements to the Commission, false paper trails, and other allegations.

[18] The alleged frauds related to three groups of transactions as follows:

(1) that David arranged the transfer of millions of dollars of investor money to benefit himself and Natasha, through loans made to entities associated with a Sean McCoshen (the McCoshen loans);

(2) that the Sharpes misappropriated millions of dollars from one of the Bridging Finance funds to acquire a management interest from Ninepoint Partners LP to their benefit (the Ninepoint loans); and

(3) that the Sharpes orchestrated loans to entities associated with a Gary Ng to facilitate the purchase of 50% of Bridging Finance’s shares from existing shareholders (the Ng Loans).

[19] In October and November 2022, the Sharpes each brought motions seeking a stay of the Commission proceedings as an abuse of process based on the Unlawful Disclosure Decision. They then each brought disclosure motions in relation to those stay motions seeking the production of documents for use on their stay motions. They sought broad production of all communications between enforcement staff, the receiver, the media, witnesses, law enforcement, and others relating to their compelled evidence, as well as any staff investigation notes or memoranda or internal Commission communications related to the receivership or cease-trade orders before or after March 30, 2021.

[20] There were then a series of decisions:

(i) the Tribunal decision dated February 21, 2023[^4], denying the appellants’ first disclosure motions (the First Disclosure Decision);

(ii) an unsuccessful attempt to seek judicial review of that decision[^5];

(iii) a second set of disclosure motions, dismissed by Tribunal decision dated May 29, 2023[^6] (the Second Disclosure Decision); and,

(iv) the Tribunal’s decision denying the stay motions dated June 21, 2023[^7] (the Stay Decision).

[21] The Commission proceedings continued, resulting in the Merits Decision[^8] and the Sanctions Decision[^9].

Tribunal Decisions

(i) Unlawful Disclosure Decision

[22] David Sharpe sought an order from the Tribunal revoking the s. 11 investigation order because the Commission wrongly disclosed his compelled testimony in the receivership. Staff’s position was that a Tribunal order was not required, relying on the then s. 17(6), which provided that disclosure could be made by a s. 11 investigator “in connection with an existing or contemplated proceedings before the Tribunal”.

[23] The Tribunal considered the legislative regime and related authorities in detailed reasons for decision. The Tribunal addressed the numerous arguments raised by Commission Staff in support of the disclosure in the receivership application, which are not set out in detail here. Among other things, the Tribunal was not persuaded that the words in s. 17(6), “in connection with an existing or contemplated proceeding” were sufficient to permit the disclosure in the receivership application.

[24] The Tribunal found that David Sharpe’s reasonable expectations of a high degree of confidentiality were defeated and that Staff had failed to explain why a s. 17 order permitting the disclosure could not have been obtained.

[25] The Tribunal then considered whether the unauthorized disclosure should result in the revocation of the s. 11 order, concluding that it should not. The Tribunal accepted that it may have the jurisdiction to revoke the s. 11 order under the rarely used authority in s. 144(1) of the Securities Act. It declined to do so here because the unauthorized disclosure was not a newly discovered fact that would likely have changed the decision to issue the s. 11 order and because, by its nature, revocation of the s. 11 order would be insufficiently connected to the receivership application even though the application relied on some of the compelled evidence.

[26] The Tribunal held that David Sharpe had not met his burden to show why it should exercise its discretion to revoke the s. 11 order and depart from established precedent that revocation should be rare and for sound reasons that did not exist in this case.

(ii) Disclosure Decisions within the Stay Motions

[27] The Sharpes then each brought stay motions that were premised on an abuse of process arising from the unauthorized disclosure of their compelled testimony in the receivership application. The Sharpes also brought disclosure motions seeking production of documents that they hoped would provide support for their motions to stay the Commission proceedings against them.

[28] As put in the First Disclosure Decision, at para. 31, the moving parties requested disclosure of a broad array of internal and external communications that might show intentional wrongdoing such as a deliberate breach of the Act, or improper communication with police agencies or the media.

[29] The Tribunal noted that a party seeking further disclosure is first required to lay a foundation to establish that the materials might be relevant, which requires more than a bare assertion or mere speculation, citing Law Society v. Natale, 2011 ONLSHP 192, at para. 7.

[30] At the hearing, the moving parties accepted that they had to show a “tenable case” for their abuse of process motions before disclosure would be ordered, referring to R. v. Ahmad, (2008), 2008 27470 (ON SC), 59 C.R. (6th) 308 (Ont. SC). The moving parties had to demonstrate that there was both a legal and factual basis for the argument sought to be advanced: Ahmad, at para. 42. On the legal basis, the Tribunal found that it had to consider whether the moving parties had a tenable case in light of what abuse of process is and when a proceeding will be permanently stayed as an abuse of process.

[31] Citing supporting cases, the Tribunal considered that a stay for an abuse of process is an extraordinary remedy that is only available in the clearest of cases. The Tribunal noted, at para. 20, that a “party who seeks the drastic remedy of a permanent stay of a proceeding faces a high bar and must establish that the conduct violates the fundamental principles of justice underlying the community’s sense of fair play and decency. They must also establish that there is no alternative remedy available. Generally, it is required that the wrong upon which the applicant relies would be manifested, perpetuated, or aggravated in the continuation in the proceedings (footnotes omitted).”

[32] The Tribunal discussed the record before it, including the Unlawful Disclosure Decision and emails with Staff indicating that they did not need a s. 17 order, which turned out to be wrong. The Tribunal noted that the moving parties conceded that on the record there was no evidence of bad faith on the part of OSC Staff. They were seeking disclosure that might shed light on that question.

[33] The Tribunal found that there were several reasons why there was no tenable case of abuse of process, which I summarize as follows:

(i) disclosure in enforcement proceedings is permitted under s. 17 of the Securities Act;

(ii) a change to s. 17 that had passed in the Legislature (but was not in force) before the receivership application would have permitted the disclosure in the receivership application[^10] – this showed that the Legislature had chosen to permit that category of disclosure and undermined the Sharpes’ submission that it would violate the community’s sense of fair play;

(iii) expressly following reasoning from the Unlawful Disclosure Decision, the receivership and the Commission proceedings were not all part of the same proceedings and there was no authority granting a stay for something done in another proceeding;

(iv) while some witnesses may come to know the content of the compelled testimony, that could also take place through lawful disclosure and any impact on their testimony could be tested in cross-examination; and,

(v) the moving parties’ concession that there was no evidence of bad faith by Staff in their motion records.

[34] Further disclosure motions were brought by the Sharpes after the Supreme Court of Canada released its decision in R. v. Haevischer, 2023 SCC 11, [2023] 1 S.C.R. 416. The Sharpes submitted that in view of that case, the prior decision on disclosure should be varied using the standard of “manifestly frivolous” rather than requiring a “tenable case” for abuse of process.

[35] The Tribunal disagreed. As set out in the Second Disclosure Decision, the Tribunal noted that Haevischer is a criminal case, and the Supreme Court’s reasons speak to that setting. Next, Haevischer addressed requests by the Crown for summary dismissal of applications to stay criminal proceedings. In that case, the Supreme Court saw its task as determining the appropriate threshold for those summary dismissals. The Tribunal also noted that the Supreme Court acknowledged that the standard of “no reasonable prospect of success” (which the Tribunal considered synonymous with the “no tenable case” standard) is a useful standard in areas of law outside of summary dismissal in criminal cases: Haevischer, at para. 77.

[36] The Tribunal further considered the differences between the summary dismissal issue and the issue before the Tribunal – a disclosure request – and the related difference with respect to onus. The Tribunal did not vary the prior decision.

(iii) Stay Decision

[37] The Sharpes’ abuse of process motions were based on the unauthorized disclosure of their compelled testimony in the receivership application. They argued that continuing the Commission’s proceedings against them would prejudice their right to a fair hearing and would bring the administration of justice into disrepute.

[38] The Tribunal noted that a stay of proceedings is a drastic remedy. The Sharpes would have to show prejudice to their right to a fair hearing or to the integrity of the justice system would be manifested, perpetuated, or aggravated through the conduct of the hearing or its outcome, and there was no alternative remedy capable of redressing the prejudice.

[39] If there was still uncertainty about whether a stay was justified, the Tribunal would balance the interests in favour of granting a stay (that is, denouncing the Commission misconduct and preserving the integrity of the justice system) against the interests in having a decision on the merits of the Commission proceeding.

[40] The Tribunal first considered and rejected the Sharpes’ submission that their right to a fair hearing was prejudiced. The Tribunal disagreed with the Sharpes’ submission that knowledge of compelled testimony could taint witnesses because the witnesses could become aware of that testimony through legitimate means (e.g., it was properly made public in the cease-trade proceeding) and the Sharpes would have ample opportunity to test each witness’s testimony in cross-examination.

[41] The Sharpes also submitted that the Commission’s unlawful disclosure was so egregious that the mere fact of going forward was offensive. They submitted that this was one of the rare cases where the state conduct was so troublesome that the Tribunal had to distance itself so as not to be seen as condoning the conduct.

[42] The Tribunal disagreed for several reasons. The Tribunal followed the reasoning in the Unlawful Disclosure Decision and rejected the Sharpes’ submission that the misconduct in the receivership proceeding was sufficiently connected to found a stay of the Commission’s proceedings. The Tribunal also noted that the appellants did not seek a sealing or other order in the receivership application.

[43] The Tribunal further noted that the appellants had not provided evidence of bad faith and declined to draw an adverse inference of bad faith from the Commission’s decision not to deliver affidavit evidence in response to the stay motion. The Tribunal considered the evidence that had been put forward by the Sharpes, including some emails with Staff and a Vice-Chair, and noted that Staff had taken the same position before the Court of Appeal in an unrelated case. The Tribunal concluded that Staff had taken a position on a novel question of law that the Tribunal ruled was mistaken.

[44] The Tribunal recognized that, even in the absence of a showing of bad faith, the Commission Staff’s breach of its own governing legislation in the receivership application was a serious matter. However, the Tribunal did not find the breach was so egregious that the mere fact of going ahead with the Commission proceedings would be offensive and bring the system of justice into disrepute. In reaching that decision, the Tribunal noted the following:

(i) the version of s. 17 of the Securities Act in force at the time of the receivership application did permit disclosure in proceedings before the Tribunal;

(ii) David’s request to preserve the confidentiality of the compelled testimony in the cease trading proceedings had been dismissed, concluding that the public interest required that it be publicly available, and this made it more likely that the Tribunal would have granted a s. 17 order if one had been sought for the receivership application;

(iii) before the unauthorized disclosure, an amendment to s. 17 of the Securities Act had been passed (but was not yet in force) that would permit disclosure in the receivership application without an order, suggesting the community’s sense of decency and fair play would not be shocked by the unlawful disclosure under the prior s. 17;

(iv) the public and those regulated under the Securities Act would not come to believe that the Commission would carry out its mandate with disregard for its governing legislation – they would view this as a single instance where Staff proceeded on a mistaken interpretation of the version of s. 17 in force at that time.

[45] The Tribunal also reasoned that, even if the first two branches of the abuse of process test were satisfied, having a decision on the merits of the allegations against the Sharpes outweighed the interests in favour of granting a stay. The Tribunal held that the allegations against the Sharpes were extremely grave and, if true, there would be great public interest in imposing significant sanctions possibly including removal from Ontario’s capital markets to protect investors. The public interest in proceeding outweighed the interests in favour of granting a stay.

(iv) Merits Decision

[46] The Tribunal conducted a lengthy hearing into the allegations. Natasha Sharpe participated, as well as Bridging Finance’s Chief Compliance Officer. David chose not to participate in the merits hearing. The receiver participated on behalf of Bridging Finance.

[47] Natasha Sharpe attempted to use the Unlawful Disclosure Decision to prevent the use of the compelled testimony at the hearing. In addition, she attempted to summons Commission Staff and counsel as witnesses to pursue the alleged abuse of process that was the subject of the stay motion. These attempts were unsuccessful.

[48] The Tribunal held that the Sharpes, both senior officers of Bridging Finance, perpetrated or participated in three securities-related frauds that involved the diversion of more than $100 million in investor funds and affected more than 26,000 investors. The Merits Decision is lengthy. This summary focuses on the main conclusions and the aspects of the Decision that relate to the grounds of appeal before this Court.

[49] On the merits, the Tribunal began with fraud and s. 126.1(1) of the Securities Act. Subsection 126.1(1) prohibits securities-related fraud by those who perpetrate the fraud and others who participate, directly or indirectly, in a course of conduct that they know or ought reasonably to know perpetrates a securities-related fraud.

[50] The Tribunal set out the framework for the analysis, which is not challenged on this appeal, and then applied that framework to the three groups of transactions at issue.

[51] McCoshen loans: The Tribunal found that David Sharpe perpetrated a fraud, in which Natasha participated, and they both contravened s. 126.1(1)(b) of the Securities Act.

[52] The Tribunal found that transfers totaling almost $20 million of investors monies were paid to one or both of the appellants, including a $250,000 payment to Natasha Sharpe. Those payments went to accounts or trusts for which the appellants were accountholders or settlors and contributors, as well as being used for construction and renovation expenses, to lease cars, to buy artwork and for cash withdrawals. The Tribunal found this use of investor money was wholly inconsistent with the objectives of the Bridging Finance funds as disclosed to investors. Further, the unauthorized diversion of investor money created a risk of prejudice to the investors’ economic interests.

[53] The Tribunal found that David knew of the dishonest acts and knew or ought to have known that his conduct was fraudulent. Natasha was directly engaged in a course of conduct that related to securities, however, the Tribunal found that she neither new nor ought to have known that a fraud was being perpetrated until $250,000 was deposited into her personal account. As of that point, she was in contravention of s. 126.1(1)(b) of the Securities Act.

[54] On the conflict of interest allegation, the Tribunal found that the relevant provision applied only to Bridging Finance, as the registered firm, and not to the individuals. The Tribunal did not find that Bridging Finance had contravened that provision or s. 126.1(1)(b) of the Securities Act.

[55] Ninepoint loans: In this instance, the Tribunal found the Natasha Sharpe perpetrated the fraud along with David. They both perpetrated a fraud related to securities and they knew or ought to have known that their conduct perpetrated a fraud breached s. 126.1(1)(b) of the Securities Act.

[56] The Tribunal considered a series of transactions and related evidence, concluding that they painted a clear picture of deceitful and dishonest conduct resulting in the use of investor money contrary to the fund’s objectives as disclosed to investors. The Tribunal found that the diversion and the subterfuge that surrounded it was deceitful and dishonest, a clear conflict of interest, and created a risk of prejudice to the investors’ economic interests.

[57] Although Bridging Finance did not contravene s. 126.1(1), it was found to have contravened s. 13.4 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) regarding conflict of interest. The Tribunal considered whether the appellants were liable for that non-compliance under s. 129.2 of the Securities Act. The Tribunal found that David was the driving force behind the Ninepoint loans and that he caused (and therefore authorized) Bridging Finance’s misconduct. The Tribunal also found that Natasha played a central role in the design of the scheme. Since they authorized Bridging Finance’s non-compliance with the conflict of interest provision in s. 13.4 of NI 31-103, the Sharpes were deemed to have not complied under s. 129.2 of the Securities Act.

[58] Ng loans: The Tribunal found that Natasha Sharpe perpetrated a fraud, in which David participated, and they both contravened s. 126.1(1)(b) of the Securities Act.

[59] These loans related to the purchase of Bridging Finance shares by a Gary Ng. He sought to purchase 50% of the company. Bridging finance loaned a Ng-owned company $32 million, from which Ng used $30 million to close the purchase. Also, Natasha Sharpe sold Ng her Bridging Finance shares for $16.6 million.

[60] The Tribunal found that the investor funds were used in an unauthorized way, causing a deprivation because investors were subject to a risk that they had not bargained for. Further, the deprivation was compounded by the subsequent discovery that the investment account Ng used as collateral for certain loans was fraudulent. The diversion of funds was dishonest, and that conflict of interest was a central characteristic of the loans.

[61] Natasha Sharpe was found to have orchestrated the loans, participated in all the significant steps, altered a document, instructed Bridging Finance staff to conceal important information and refrain from having due diligence carried out. David was involved in arranging at least the original $32 million loan to Ng and he knew of the dishonesty that permeated the approval process, knew that this investor money was being used in an unauthorized way, and knew or ought to have known that this use was fraudulent. The Tribunal found that both the Sharpes had contravened s. 126.1(1) of the Securities Act.

[62] Obstructing the Investigation: The Sharpes were both found in contravention of s. 122 (1)(a) of the Securities Act for making false or misleading statements in any material, evidence or information submitted to the Commission.

[63] The Tribunal found that both appellants gave misleading answers in their examinations during the investigation. The Tribunal that David Sharpe instructed the urgent deletion of tens of thousands of emails and the alteration of other documents and that Bridging Finance provided misleading information to the Commission (for which the appellants were liable to differing extents). The Tribunal found that David attempted to intimidate former Bridging Finance employees who were co-operating with the receiver and that Natasha improperly permitted David to listen in on her examination in the investigation.

(v) Sanctions Decision

[64] The Tribunal held a sanctions hearing in which David Sharpe did not participate. Natasha did participate and, among things, relied on the unauthorized disclosure of her compelled testimony to submit that there should be no sanctions against her. The imposition of sanctions despite the unauthorized disclosure is not directly contested on these appeals.

[65] The Tribunal released detailed reasons for the sanctions that were imposed, beginning with its jurisdiction under s. 127(1) of the Securities Act to impose sanctions where it is the public interest to do so. The Tribunal cited relevant cases and noted that the jurisdiction was protective and preventative, not punitive. The exercise of its jurisdiction needed to be consistent with the purposes of the Act, including protecting investors from unfair, improper and fraudulent practices, and fostering fair and efficient capital markets and confidence in them. The Tribunal cited the relevant factors, including the seriousness and recurrent nature of the misconduct, the experience of the Sharpes, whether there was remorse and other mitigating factors, and specific and general deterrence.

[66] The Tribunal made numerous findings, not all of which will be repeated here.

[67] The Tribunal found that David Sharpe’s conduct on the McCoshen loans was egregious and among the most serious frauds to ever come before the Tribunal. The amount involved and the number of transactions was significant. The diversion of money directly harmed investors, and the diversion of about 90% of the money was purely for his personal benefit. David’s role as CEO and background as a registrant made his conduct “particularly galling”. The Tribunal found that Natasha Sharpe’s conduct was not as egregious, although her background, experience and role were aggravating factors. The Tribunal disagreed with her submission that the unauthorized disclosure of her compelled testimony was a reason to give no sanction.

[68] On the Ninepoint loans, the Tribunal held that while that fraud was not recurrent, it was very serious. While David did not benefit directly, he did so indirectly, and that the creation of misleading documents and his manipulation of the chief compliance officer were significant aggravating factors. On these loans, there was no reason to draw significant distinctions between the Sharpes.

[69] On the Ng loans, the Tribunal found that the fraud was serious, and orchestrated by Natasha, but that her repayment of the proceeds of the sale of her shares was a mitigating factor. David participated in a lesser way.

[70] For each of the three sets of loans, the Tribunal considered the sanction factors and ordered disgorgement and administrative penalties briefly summarized below.

[71] The Tribunal further considered sanctions for the Sharpes’ obstruction of the Commission’s investigation. The Tribunal found that David’s misconduct was “brazen, extensive, deliberate and recurrent”. The Tribunal found that he had “ignored both Bridging and his own responsibilities, showing complete disregard of the Commission’s and the court-appointed receiver’s responsibilities and authority. Worse, he used his power to co-opt others into deceiving the Commission.”

[72] On obstruction, the Tribunal held that David Sharpe’s misconduct “may be the most egregious the Tribunal has ever encountered.”

[73] The Tribunal found that Natasha Sharpe’s obstruction was significantly less, but it was deliberate, included the co-opting of others, and demonstrated a disregard for the Commission’s responsibilities and authority.

[74] For his egregious misconduct, the Tribunal permanently banned David Sharpe from any participation in the capital markets. Natasha submitted that she had no intention of pursuing a career in the capital markets and did not object to the restrictions proposed with certain carve-outs that are not challenged on her appeal.

[75] The market restrictions and other sanctions included the following:

(i) David Sharpe was,

• permanently precluded from acquiring or trading in any securities, from becoming or continuing as an officer or director of an issuer or registrant, and from becoming or acting as a registrant or promoter;

• ordered to pay an administrative penalty that, for all the findings of breach, totaled $3.6 million;

• ordered to disgorge a total of about $18 million; and,

• order to pay costs of about $750,000.

(ii) Natasha Sharpe was,

• permanently precluded from acquiring or trading in any securities (with some exceptions), from becoming or continuing as an officer or director of an issuer or registrant, and from becoming or acting as a registrant or promoter;

• ordered to pay an administrative penalty that, for all the findings of breach, totaled $1.95 million;

• ordered to disgorge $750,000; and,

• ordered to pay costs of about $425,000.

(iii) David and Natasha were jointly and severally ordered to disgorge an additional $2 million.

[76] Natasha Sharpe challenges the $2 million disgorgement order in her appeal, which is discussed further below. No other specific issue regarding the Sanction Decision is raised by either appellant.

Issues and Standard of Review

[77] The appellants submit that the Tribunal erred as follows:

(i) by denying their requests for disclosure of documents for their stay motions, as set out in the First and Second Disclosure Decisions; and,

(ii) by denying their stay motions.

[78] In addition, Natasha Sharpe submits that the Tribunal erred in the Sanction Decision, by ordering that she pay $2 million jointly and severally with David.

[79] The appellate standard of review applies to these statutory appeals: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653, at para. 37. As set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, the standard of review is correctness for questions of law, palpable and overriding error for questions of fact and palpable and overriding error for questions of mixed fact and law except extricable questions of law, which are reviewed for correctness.

Analysis

(i) Disclosure sought for Stay Motions

[80] The appellants submit that the Tribunal erred in refusing their disclosure motions seeking documents for their stay motions. They submit that the Tribunal erred by applying a threshold for obtaining the requested disclosure, or alternatively by applying the wrong threshold, or alternatively by failing to find that the Sharpes had met the requisite threshold.

[81] The Commission submits that the appellants agreed that there was a threshold for their disclosure motions at the time and cannot resile from it now. Although the appellants are essentially raising a new issue on appeal, permitting it does not change the outcome of the appeal. The Commission further submits that the threshold requires that the appellants show a “tenable case” of abuse of process and that there is no appealable error in the Tribunal’s decision that the threshold was not met in this case.

[82] The Sharpes sought documents in support of their abuse of process motions, which were based on allegations of Staff misconduct. Briefly, they sought broad production of all communications relating to their compelled testimony between the Commission, the receiver and potential witnesses, all internal correspondence, investigation notes, and memoranda regarding the receivership or cease trade orders before and after the receivership, as well as communications with the media.

[83] The appellants submit that the Tribunal should not have required that they meet any threshold before receiving the requested disclosure from the Commission. They submit that the Tribunal ought to have applied the criminal disclosure standard from R. v. Stinchcombe, 1995 130 (SCC), [1995] 1 S.C.R. 754, as adopted in the rules of the Capital Markets Tribunal Rules of Procedure. However, that principle, as it appears in the Tribunal’s rules, applies to the disclosure of documents regarding allegations against a party for breaches of the Securities Act, not disclosure for a party’s abuse of process motion.

[84] The appellants accept that even in the criminal context, the defence must first lay a proper evidentiary foundation for a claim for abuse of process, at least in some situations. Specifically, the appellants accept that there must be a foundation before a court will order disclosure for a claim of the improper exercise of prosecutorial discretion because there is a presumption of good faith: R. v. Nixon, 2011 SCC 34, [2011] 2 S.C.R. 566, at para. 27. The appellants submit that the issue they rely on, the unlawful disclosure of their compelled testimony by Commission Staff, is not a matter of prosecutorial discretion.

[85] The appellants did not make these submissions on the disclosure motions. At that time, the appellants conceded that they had to show a “tenable case” of abuse of process. The respondent therefore objects to this change of position and submits that we should not permit this new argument on appeal. However, even if we permit the argument, the appellants have not shown that the Tribunal erred. Cases cited by both sides show that the use of a threshold for disclosure is not restricted to cases involving the exercise of Crown discretion in the criminal context – it applies in a variety of circumstances including where there have been allegations of abuse of process: Ahmad, at paras. 16, 42; R. v. Nowack, 2019 ONSC 5345, at paras. 72-73; R. v Christhurajah, 2016 BCSC 2393, at paras. 52, 70; R. v. Georgiou, 2025 ONSC 1477, at paras. 40-41.

[86] I am not persuaded that the Tribunal erred in applying a threshold in the context of these abuse of process motions, in which the appellants rely on the unlawful disclosure by Commission Staff in the receivership proceedings.

[87] Moving to the applicable threshold, the Tribunal used the then agreed threshold that required showing a “tenable case,” also called the “reasonable prospect of success” threshold.[^11] The appellants submit that the Tribunal erred when it declined to use the then new “manifestly frivolous” threshold from Haevischer. The appellants submit that the “no reasonable prospect of success” threshold came from the criminal law and so too should this threshold.

[88] I agree with the appellants that proceedings against registrants under the Securities Act may involve serious allegations and consequences (as was the case here). However, the Tribunal correctly declined to adopt the Haevischer threshold in this case because of the following:

(i) Haevischer is a criminal case, and the reasons speak to that setting – the Supreme Court expressly characterized the issue at para. 1 as “the standard to be applied in criminal cases”;

(ii) R. v. Haevischer addressed requests by the Crown for summary dismissal of applications to stay criminal proceedings – the Supreme Court saw its task as determining the appropriate threshold for those summary dismissals;

(iii) the summary dismissal issue is different from the issue that was before the Tribunal – a disclosure request in abuse of process motions – with the related difference with respect to onus; and,

(iv) the Supreme Court acknowledged, at para. 77, that the standard of “no reasonable prospect of success” (which the Tribunal considered synonymous with the “no tenable case” standard) is still a “useful standard” in other areas of law.

[89] There remains the issue of whether the applicable threshold for disclosure was met, specifically a tenable case for abuse of process. The appellants submit that the Unlawful Disclosure Decision is enough to meet the threshold given the assurances of confidentiality given to the Sharpes and their privacy interests. However, these submissions do not take into account the context of the Unlawful Disclosure Decision or the legal principles that apply when determining whether there is a tenable case of abuse of process.

[90] The full context of the Unlawful Disclosure Decision is set out in lengthy reasons. The issue before the Tribunal was whether to revoke its s. 11 investigation order. Despite acknowledging David Sharpe’s reasonable expectations of a high degree of confidentiality and finding they were wrongly defeated, the Tribunal held that Sharpe had not met his burden to show why the Tribunal should exercise its discretion to revoke that order.

[91] Among other reasons for declining to revoke the order, the Tribunal held that that revocation in response to the unauthorized public disclosure was not an appropriate remedy in this case. Nor do the reasons for decision condemn the Commission for its course of conduct, albeit wrong in law once the issue had been determined. On the contrary, the Unlawful Disclosure Decision held that the issue was novel.

[92] Moving to the applicable principles when applying the threshold for disclosure, the Tribunal discussed those principles without error.

[93] The Tribunal followed cases from Law Society discipline proceedings, which are apt given the similar regulatory context. At para. 14 of the First Disclosure Decision, the Tribunal held that “a party seeking further disclosure is required to first lay a foundation to establish the materials sought might be relevant.” A “request for disclosure cannot be allowed to encourage ‘fishing expeditions’ or unduly prolix proceedings.”

[94] The Tribunal, at para. 14, adopted the rationale from Law Society of Upper Canada v. Natale, 2011 ONLSHP 192, that there are serious implications in a motion for disclosure brought in the context of an allegation of abuse of process. If any respondent could make an allegation of abuse of process and require the prosecuting or professional authorities to turn over its counsel’s brief and its confidential files, which would not otherwise be producible, serious harm would be done to the prosecution of the professional charges: Tribunal reasons at para. 15, citing Natale at para. 9, which quotes from Law Society of Upper Canada v. Matthew Joseal Igbinosun, 2010 ONLSHP 134, at para. 52.

[95] The Tribunal held that a party bringing an abuse of process motion must be able to “demonstrate that there is both a legal and a factual basis for the argument sought to be advanced. This demonstration must be rooted in the record, or be established by an offer of proof such as affidavit evidence, that can be dealt with expeditiously by the court”: Tribunal decision at para. 16, quoting from Ahmad, at para. 42.

[96] Applying these principles to the motion materials before it, the Tribunal found that the appellants had not shown a “tenable case” or reasonable prospect of succeeding on their abuse of process motions. As noted by the Tribunal, a stay for an abuse of process is an extraordinary remedy that is only available in the clearest of cases.

[97] The Tribunal found that there were several reasons why there was no tenable case of abuse of process, which I have summarized above. Among them, s. 17 of the Securities Act permitted disclosure in enforcement proceedings. Further, at the time of the disclosure the Legislature had chosen to amend s. 17 to permit that category of disclosure, which undermined the Sharpes’ submission that it would violate the community’s sense of fair play. The Tribunal also relied on the reasoning from the Unlawful Disclosure Decision showing that the receivership was separate, noted that any impact on witness testimony could be tested in cross-examination, and noted that the moving parties had conceded that there was no evidence of bad faith by Staff in their motion records.

[98] The appellants continue to submit that they need production of the sought-after documents to explore the question of bad faith. This disregards the legal principles correctly relied on by the Tribunal that properly require more than the allegation of abuse of process based on the Unlawful Disclosure Decision.

[99] I conclude that the appellants have not shown an appealable error in the First or Second Disclosure Decisions.

(ii) Stay Issue

[100] The appellants submit that the Tribunal erred in failing to stay the proceedings against them as an abuse of process. They submit that the unauthorized disclosure here is shocking and should be condemned by labelling it an abuse of process. They further submit that bad faith of Commission Staff should be implied, that they have been prejudiced, and that there is no alternative remedy to address the prejudice. Natasha Sharpe submits that there must be a stay “to punish” the Commission in the public interest and maintain the integrity of the disciplinary process. For the following reasons, I disagree.

[101] With respect to the legal test for a stay, the appellants have not pointed to a legal error in the applicable principles set out in the Stay Decision. Those principles are amply supported by the relevant authorities.

[102] As put by the Tribunal, a stay of proceedings is a drastic remedy. The threshold to establish an abuse of process is high. Based on the position that the appellants took on abuse of process (sometimes called the residual category: see R. v. O'Connor, 1995 51 (SCC), [1995] 4 S.C.R. 411, at para. 73), the appellants had to show the following:

(a) that prejudice to their right to a fair hearing, or to the integrity of the justice system, would be manifested, perpetuated, or aggravated through the conduct of the Commission hearing;

(b) that there was no alternative remedy capable of redressing the prejudice; and,

(c) if there was still uncertainty about whether the first two criteria justified a stay, the Tribunal should balance the interests in favour of granting a stay (e.g., denouncing misconduct and preserving the integrity of the justice system) against the interests in having a decision on the merits of this proceeding.

Citing R. v. Babos, 2014 SCC 16, [2014] 1 S.C.R. 309, at para. 32, quoting from R. v. Regan, 2002 SCC 12, [2002] 1 S.C.R. 297, at paras. 54, 57.

[103] The appellants submit that abuse of process has previously been recognized where highly confidential information has been improperly disclosed including in a chartered accountant discipline case, Clark v. Complaints Inquiry Committee, 2012 ABCA 152, 524 A.R. 322. The Sharpes have also put forward criminal cases, including the recent case of R. v. Whitlock, 2025 ONSC 6006.

[104] I accept that an abuse of process was found in other cases involving disclosure, but that does not mean that this Tribunal erred in the Stay Decision. “The burden is on the moving party to prove the abuse of process on a balance of probabilities. A claim of abuse of process is necessarily fact specific as it expresses society's changing views about what is unfair or oppressive”: Paul Azeff et al., 2012 ONSEC 16, at para. 283, quoting R. v. D. (E.) (C.A.), (1990) 1990 6911 (ON CA), 73 O.R. (2d) 758 (C.A.), at pp. 766-767.

[105] With respect to prejudice to their right to a fair hearing, at the Tribunal the appellants relied on unfairness arising from witnesses learning of their compelled testimony through the unauthorized disclosure. The Tribunal addressed that issue and no error in that regard has been alleged on these appeals. Other grounds for granting a stay were raised then and now.

[106] On prejudice to the integrity of the justice system, the appellants submit that the Commission’s conduct was egregious, and in breach of its own statute, and thus caused the appellants significant prejudice.

[107] The appellants submit that bad faith should be presumed because the Commission did not put forward evidence in response to the stay motions that explained Staff’s decision to use the compelled testimony in the receivership application without a s. 17 order. The authorities provided on this ground, such as Clark and Nixon, are highly distinguishable on their facts. Here, the Tribunal found, on the record before it, that they would not draw an adverse inference about the conduct of Staff. In doing so, they considered the emails put forward as well the other motion materials.

[108] The Tribunal recognized that, even in the absence of a showing of bad faith, the Commission Staff’s breach of its own governing legislation in the receivership application was a serious matter. However, the Tribunal did not find the breach was so egregious that going ahead with the Commission proceedings would be offensive and bring the administration of justice into disrepute.

[109] In reaching that decision, the Tribunal noted that the version of s. 17 of the Securities Act in force at the time of the receivership application did permit disclosure in proceedings before the Tribunal and that before the unauthorized disclosure took place, an amendment to s. 17 of the Securities Act had been passed although not yet in force. That amendment would permit disclosure in the receivership application without an order, suggesting the community’s sense of decency and fair play would not be shocked by the unlawful disclosure under the prior s. 17. The Tribunal followed the reasoning in the Unlawful Disclosure Decision regarding the receivership.

[110] The Tribunal further noted that David Sharpe’s request to preserve the confidentiality of the compelled testimony in the Commission’s cease trade proceedings had been dismissed, concluding that the public interest required that it be publicly available.

[111] The Tribunal found that the public and those regulated under the Securities Act would not come to believe that the Commission would carry out its mandate with disregard for its governing legislation – they would view this as a single instance where Staff proceeded on a mistaken interpretation of the previous version of s. 17.

[112] The appellants also rely on the prejudice they have suffered personally. I accept for the purposes of these appeals that the appellants were the subject of extensive negative media coverage immediately after the unlawful disclosure and, in the period between that disclosure and the later lawful disclosure of that same testimony, they would have suffered a loss of reputation and other prejudice. The appellants submit that this undermines the integrity of the justice system and cannot be remedied without a stay. The Tribunal considered these submissions and noted that David Sharpe still proceeded to request a sealing order from the Tribunal (unsuccessfully) and neither appellant sought either a sealing order or other redress in the receivership.

[113] The appellants have shown no error with the first step above, requiring prejudice to their right to a fair hearing, or to the integrity of the justice system, would be manifested, perpetuated, or aggravated through the conduct of the Commission hearing. That alone justifies denying a stay. Nor has an error been shown regarding prejudice under the second step.

[114] Although not required to do so, the Tribunal proceeded to undertake the balancing in step three. The Tribunal held that even if the appellants had established the first two steps, having a decision on the merits of the allegations against the appellants outweighed the interests in favour of granting a stay.

[115] The Tribunal noted that the appellants were registrants and the most senior leaders at Bridging Finance, which managed investment vehicles focused on making short-term loans to borrowers. The appellants were then alleged to have defrauded institutional and retail investors out of millions of dollars through their dishonesty and deceit, funneling investor funds to themselves and Bridging Finance, and obstructing the Commission’s investigation into their conduct.

[116] The Tribunal held that the allegations against the Sharpes were extremely grave and, if true, there would be great public interest in imposing significant sanctions possibly including removal from Ontario’s capital markets in order to protect investors. The Tribunal reasoned that the public interest in proceeding outweighed the interests in favour of granting a stay.

[117] I see no appealable error in this reasoning, which strongly supported the denial of a stay.

(iii) Sanction Issue

[118] Natasha Sharpe challenges the Sanction Decision with respect to one order – that she is jointly and severally liable, along with David, to disgorge $2 million in respect of the McCoshen loans. The Tribunal held that she benefited from the kickbacks that had flowed to David because $2 million was transferred to their joint bank account.

[119] Disgorgement is a statutory remedy that a Tribunal may order under s. 127(1) 10 of the Securities Act. Section 127(1) provides that the Tribunal may make certain orders “if it is of the opinion it is in the public interest to do so” including disgorgement under subparagraph 10.

[120] Natasha submits that disgorgement is an equitable remedy and unavailable because Staff did not come to the Tribunal hearing with “clean hands.” The Tribunal has described disgorgement as an equitable remedy in decisions discussing its role to prevent a wrongdoer from retaining funds obtained through the wrongdoing: e.g., Blue Gold Holdings Ltd., 2016 ONSEC 37, at para. 30; Black Panther et al, 2017 ONSEC 8, at para. 71.

[121] However, we have not been provided with authority that Staff cannot seek disgorgement under the Securities Act, or that the Tribunal cannot grant it, because of a prior unlawful act of Staff. There is no question that the Tribunal was well aware of the Unlawful Disclosure Decision, which continued to be raised at every step, including at the sanctions hearing. Natasha has not shown that the Tribunal erred in exercising its discretion under s. 127 of the Securities Act to order disgorgement in the face of the unauthorized disclosure.

[122] Natasha further submits that the Tribunal applied an overly broad test for disgorgement by awarding it simply on the basis that the monies went into a joint account. She submits that disgorgement is only appropriate if she benefited from the funds.

[123] This is a challenge to findings of fact, without showing palpable and overriding error. The Tribunal found that David received $19.5 million in kickbacks, from which $1.965 million flowed into the Sharpes’ joint bank account. Natasha claims that there was no evidence that the $1.965 million paid into the joint account was traceable to the kickbacks, which is contrary to the Tribunal’s findings of fact based on forensic accounting evidence and bank records.

[124] Natasha also challenges the figure of $2 million. First, Natasha submits that the sanction should be limited to the funds that flowed to the joint bank account commencing in October 2017, which was when she was found to have known, or that she ought to have known, about David’s fraudulent kickback scheme. Natasha therefore submits that the figure should be reduced by the amount that was transferred into the joint bank account before October 2017, specifically $615,000. However, the necessary elements for disgorgement under s. 127(1) 10 were shown here. Natasha had not complied with Ontario securities law with respect to the fraudulent kickback scheme, and, as a result of that fraud, monies were transferred to the joint account including the $615,000.

[125] Finally, Natasha submits that the amount should be $1.965 million, and that the Tribunal must have rounded it up to $2 million. On this point alone, Natasha correctly submits that the Tribunal’s finding of fact was $1.965 million. Disgorgement relates to the funds that flowed to the joint account, not a rounded higher figure. There are no reasons that explain the higher figure. This correction should be made.

[126] Subject to the above correction, Natasha has not shown an appealable error in the Tribunal’s sanction requiring that she disgorge the ill-gotten gains that went into the joint bank account, jointly and severally with David.

Decision on Appeals

[127] David Sharpe’s appeal is dismissed with costs to the respondent in the agreed upon amount of $10,000, all inclusive. Natasha Sharpe’s appeal is dismissed subject only to the correction referred to above. That joint and several disgorgement amount shall be varied to be $1.965 million. It is not apparent that the appeal was needed to accomplish that correction. Natasha shall pay costs to the respondent in the amount of $10,000, all inclusive.

___________________________ Matheson J.

I agree

O’Brien J.

I agree

Mandhane J.

Date: May 12, 2026

Sharpe v. Ontario Securities Commission, 2026 ONSC 1394

DIVISIONAL COURT FILE NOS.: 581/25 and 583/25 DATE: 20260512

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Matheson, O’Brien and Mandhane JJ.

BETWEEN:

DAVID SHARPE and NATASHA SHARPE

Appellants

– and –

ONTARIO SECURITIES COMMISSION

Respondent

REASONS FOR DECISION

Matheson J.

Date: May 12, 2026

[^1]: The decisions at issue begin before and some are also after the tribunal was formally named the Capital Markets Tribunal. For readability that name, or “Tribunal” is used throughout and “Staff” or “Commission Staff” is used throughout to refer to the Commission party before the Tribunal. As was done by the Tribunal, David Sharpe and Natasha Sharpe are sometimes referred by their first names, and sometimes as the Sharpes, for clarity.

[^2]: 2022 ONCMT 35

[^3]: 2022 ONSEC 3

[^4]: 2023 ONCMT 8

[^5]: 2023 ONSC 2819

[^6]: 2023 ONCMT 21

[^7]: 2023 ONCMT 24

[^8]: 2024 ONCMT 23

[^9]: 2025 ONCMT 10

[^10]: The amendments came in effect on April 29, 2022, before the Sharpes brought their abuse of process motions.

[^11]: The use of those phrases interchangeably has not been challenged.