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.

Bridging managed more than C$2 billion at its peak, focusing on high-risk loans to borrowers shut out by traditional banks. The Ontario Securities Commission appointed PwC to take control of the firm in ...