The chief executive officer of a US$1.7 billion Canadian private lender closed his personal bank account just days after he was questioned by investigators about receiving undisclosed payments from a client, court documents say.

David Sharpe, the former CEO of Bridging Finance Inc., closed a personal checking account at the Bank of Montreal four business days after the Ontario Securities Commission questioned him about his relationship with Sean McCoshen, a Canadian entrepreneur who has proposed an Alberta-to-Alaska railway.

McCoshen’s companies borrowed more than $100 million (US$82.6 million) from Bridging-managed funds. During the same period, a separate numbered company controlled by McCoshen transferred $19.5 million into Sharpe’s personal account, the OSC has alleged. The payments took place between July 2016 and June 2019.

In fact, six payments worth $17.2 million were transferred to Sharpe within five business days of Bridging advancing funds to the railway project and other McCoshen-connected firms, according to a new document filed by the securities commission in an Ontario court.

Those transactions and others are at the heart of the case, which has seen a court appoint PricewaterhouseCoopers take control of the Toronto-based firm, a private lender to small- and medium-size companies. The OSC is probing Bridging and former senior executives for allegedly mismanaging funds and failing to disclose conflicts of interest, and has claimed in court documents that Sharpe tried to mislead its investigators.

Through a spokesperson, Sharpe declined to comment. McCoshen couldn’t be immediately reached for comment.

Sharpe was questioned by the securities commission on Oct. 27, 2020 about his relationship with McCoshen. He closed the Bank of Montreal account on Nov. 2. In February, McCoshen dissolved the numbered company that made the transfers, the court documents say.

Sharpe and his wife, Natasha Sharpe, co-founded and ran the firm together. They were fired last week by PricewaterhouseCoopers.