Walied Soliman lobbying at OSC for Ninepoint Partners

In this post, I will show an intriguing email by celebrity corporate lawyer Walied Soliman to then OSC Chair Grant Vingoe (and others) on behalf of Ninepoint Partners. In this email, Walied is pleading for the OSC to tell everyone that Ninepoint did nothing wrong that contributed to the collapse of Bridging Finance.

Here’s the context of this email:

Ninepoint was famously Bridging Finance’s BFF - Ninepoint parted ways with Bridging Finance in 2018, when it suspected some shenanigans at some funds where both parties were co-managers. But did Ninepoint alert regulators? We doubt it, and if they did, the regulators were slow to react. Three years post-split, in May 2021, the OSC forces Bridging Finance into receivership and launches a full investigation. Investors are screwed, it’s the talk of Bay Street. There’s a bit of a contagion effect to other private debt funds that percolates slowly over many months. In September 2021, OPM Wire started writing critically about Ninepoint private debt funds.

By the end of February 2022, overwhelmed by the wave of redemptions, Ninepoint has to put up gates on several private debt funds. This was a bit of an existential crisis for Ninepoint, considering how material debt funds are to their overall assets under management. In early March, the enforcement division of the OSC has some sort of email exchange with Ninepoint. This could be them asking questions of Ninepoint or it could be Ninepoint asking the OSC to clear the cloud overhanging them because of their prior association with Bridging Finance. (I don’t have access to those emails.) On Sunday, March 6th, Ninepoint Co-CEO John Wilson writes to his lawyer Walied Soliman as follows:

John Wilson's request is that the OSC needs to exculpate Ninepoint pronto in respect of its conduct as Bridging Finance's former BFF. He says the "process below", likely meaning, the lower-level interactions with the OSC, is going to "take forever." References to "the blog" are references to OPM Wire - Ninepoint complained many times that this blog was a key reason behind advisors fleeing their funds.

In response to John Wilson's plea, five hours later, Walied Soliman decides to escalate matters to the most senior people at the OSC: Chair Grant Vingoe, Enforcement Director (as Jeff Kehoe then was) and the General Counsel (Naizam Kanji). That is the email I posted at the top.

Here’s my analysis of some of Walied’s lines:

Walied: “I send this to you as a friend of the capital markets even more than as a lawyer.”

Come on, he’s just another slimeball lawyer, what does being a “friend of the capital markets” mean. We are all friends of the capital markets, aren’t we?

Walied: “From everything I have diligenced, Ninepoint has not come close to committing a wrong.”

Ninepoint was co-manager along with Bridging Finance at a time when major fraud was brewing. They were either complicit, willfully blind or incompetent. Walied's "diligence" is probably not worth much.

Walied: “I fear the worst over the coming weeks for one of Canada’s premier registrants.”

LOL. He’s being a drama queen. Ninepoint is a peddler of crappy funds. Even if the "worst" happened, it would be inconsequential to Ontario’s capital markets. Purpose 1A of the OSC is to protect investors, not registrants. In the years following this email, "Premier Registrant" Ninepoint's private debt funds have proven to be a dog's breakfast. Ninepoint lives on, but clients are suffering the consequences. If you can find one arm's-length investor with money in their debt funds who is happy, I'd like to hear from them.

I feel the overall thrust of Walied's email is to throw his weight around and to portray Ninepoint’s issues as some sort of systemic issue. Walied is the Chair of Norton Rose, the last law firm that Grant Vingoe worked at before joining the OSC. Walied is also politically connected. He had a direct impact on Grant's job at the OSC, because he was named by the Ontario Minister of Finance to chair a taskforce to modernize Ontario capital markets regulation. One of the key recommendations he made is that that the roles of Chair and CEO of the OSC be split. At the time Walied emailed Grant Vingoe, the Ontario Minister of Finance was considering whether to appoint Grant as the first dedicated CEO of the OSC. On March 24, 2022, Grand did become the first CEO under the new governance framework. His pay remained substantially unchanged at around $700k per year.

Some further background about the people involved. Former Enforcement Director Jeff Kehoe’s last job before joining the OSC was for Michael Wekerle’s ill-fated Difference Capital. He says on LinkedIn that he oversaw “two public offerings that raised more than 100 million dollars in less than two years.” If that’s the case, he contributed to the destruction of more investor money than the majority of people he has led an enforcement action against. Ninepoint has also lent tens of millions to Michael Wekerle’s music venue El Mocambo.

As for General Counsel Naizam Kanji, he’s an OSC lifer. Walied could tell you all about the last few meals Naizam has had, if I can judge by this LinkedIn post.

On April 20th, 2022, forty-five days after Walied's plea, the OSC seems to have given Ninepoint a clean bill of health. Ninepoint issued a press release saying that "after a review by the OSC, it has received confirmation from the OSC that it is not the subject of any investigation arising from its dealings with Bridging Finance."

I asked the OSC, but they have not been willing to deny that Grant Vingoe engaged with Walied. At first, the Head of Public Affairs said he'd answer, then he ghosted me and then, when pressed, he invoked confidentiality. When I asked for the OSC's general practice as to senior executives engaging with a registrant under possible investigation, he refused to answer. Grant Vingoe's inability to deny engaging with a registrant under a cloud of suspicion taints the process. As a matter of law, the CEO of the OSC is the ultimate enforcer, that is not in dispute. But as a matter of good governance, they should stay above the fray. If a worker bee investigator screws up, they can be taken off the file and be replaced by another investigator. But if the CEO starts meddling, the entire institution is tainted. The OSC has formal, written schemes of delegation (called "delegation orders") as is common in public administration. Walied's email can be seen as attempting to override these established processes.

One of the sources of tension that led to the Ninepoint-Bridging split is that Ninepoint had launched a private debt fund all its own, ie the "Waygar" fund. Bridging's David Sharpe saw it as a competitor. Indeed, Ninepoint's Waygar fund would prove a formidable rival - if making crappy loans is the goal. It's down about 48% in the past year. That's just one example of Ninepoint's incompetence (or worse), we have documented several others in other posts.

This might be as good a time as any to mention that last year, I got a call from a well-known Bay Street figure who said that a senior OSC executive was taking bribes. He seemed pretty serious. I didn’t know what to do with that information. But now, I know the OSC will tell me: “We can’t comment about our bribing practices, out of respect for the confidentiality of our stakeholders.” I am not saying that Walied bribed someone at the OSC. But his email makes it more credible that the OSC is subject to improper influence. After all, what does speaking about “solutions we might work on together” mean? Why couldn’t the "solutions" have been proposed in writing? Walied was writing about complicated legal and technical matters. Would you say his email was lawyerly or that he was trying to coast on the strength of his stature? I have written more legalistic emails trying to get a refund at Walmart. Was the OSC supposed to take Walied at his word that he had "diligenced" Ninepoint as a "premier registrant?" At a minimum, Walied's email shows you can get pretty high in law, while confusing "its" and "it's."

Any allegation of bribing at the OSC seems far-fetched. But is it entirely outside the realm of what's possible? If you followed politics in the 90s, you might be aware of this incident, implicating a mentor of Walied, Brian Mulroney. He was also a Norton Rose lawyer, just like Walied and OSC top banana Grant Vingoe!