Riley faces sexual harassment suit from startup founder

Riley faces sexual harassment suit from startup founder

The co-founder and CEO of a weather monitoring service is seeking more than $25 million in damages, alleging prominent Winnipeg businessman Sandy Riley sexually assaulted her and caused her mental distress when he tried to have her fired from her own company after she rebuffed his sexual advances.

Susan Bonk, a business consultant who co-founded Precision Weather Solutions with a meteorologist in 2013, claims the 72-year-old Riley — CEO and president of Richardson Financial Group, former chairman of Investors Group and a member of both the Order of Canada and Order of Manitoba, invested in her company and became its board chairman, but then used that position to repeatedly attempt to have a relationship with her.

Bonk is also suing local businessmen Charles Loewen, the former CEO of Loewen Windows and Doors, Bob Silver, owner of Western Glove Works and chairman of the board of FP Canadian Newspapers Limited Partnership, the owner of the Free Press, and William Watchorn, former CEO and president of ENSIS Growth Fund, alleging that while serving as board members of PWS’s parent company the Galton Corporation, they were aware of Riley’s alleged sexual harassment and failed to take action.

“As a woman of colour, first-generation immigrant and, in particular, a female founder of a STEM company, I am accustomed to facing challenges,” Bonk said Monday in a statement to the Free Press.

“Entrepreneurship is the road less traveled. It takes enormous dedication and heart to make a go of it for anyone. The structural barriers to funding, contacts and other supports make STEM entrepreneurship for racialized women almost impossible.

“So today, I am weary of the uphill battle but know I am on the right path.”

Bonk said Riley is no longer Galton’s chairman and “the status of his investment is a question that is currently before the courts in related litigation.”

Lawyer Richard Schwartz, who represents all four defendants, said “they categorically deny all the allegations made by Ms. Bonk in her claim.

“They further say that the accusations are fabricated and are an attempt by Ms. Bonk to dissuade a long-standing commercial dispute involving the $3.5 million investment made by a group of investors, including Mr. Riley, that is still not fully or properly accounted for.”

Schwartz said all four launched legal action in 2017 to find out what happened to the funds they invested.

“(They) refuse to be deterred by these allegations, and eagerly await setting the record straight through the appropriate legal channels.”

In a statement of claim filed in Manitoba Court of King’s Bench last August, Bonk alleges she first met Riley in 2013 when they were flying in business class together from Toronto to Winnipeg. She said as soon as she told Riley what her business was he offered to invest in it, but she told him the company wasn’t looking for investors.

Two years later, after a former customer sued PWS, Bonk accepted Riley’s investment offer. He ended up taking a 25 per cent stake in the company.

“(She) felt dependent on Riley — a prominent and powerful member of the Manitoba community — and knew she needed to remain in his good graces to raise additional capital, which is typical for growing technical companies,” the lawsuit claims.

But Bonk alleges that after Riley’s investment, he began setting up meetings with her, usually at Hy’s Steakhouse, for dinner or drinks, and “began making sexually charged comments about Susan’s appearance” as well as asking her about her personal life and whether she was dating anyone.

She claims that around December 2016, he insisted on driving her home and, when they got there, he tried to hug her and she felt his “hand graze against her breast.”

Another time, Bonk claims, Riley switched the location of a meeting from a restaurant to his home, where she felt “increasingly fearful of being sexually assaulted.” She says she was able to call a cab but had to brush past him to leave.

Bonk said Riley once drove them to Lake of the Woods, but instead of looking for places to set up weather stations for PWS, he drove around to various cottages while talking about his personal life.

When the pair returned to Winnipeg, Riley picked up liquor on the way to Bonk’s condo and insisted on coming in for a drink.

She claims while she only drank water, Riley drank two bottles of wine and several glasses of scotch and made “numerous sexual overtures,” “touched her in various ways, including grabbing her breasts and asked her to show him her bedroom,” and “said he was unhappy in his marriage and wanted to be with Susan.”

Bonk claims she was finally able to get Riley to leave, but that’s when he began complaining about her to the company’s board of directors and investors, attempted to get her fired and tried to undermine her authority with staff.

In a statement of defence filed last month, Riley denied all the allegations relating to sexual misconduct, saying the meetings were always “professional and cordial,” and also denied he told Bonk when they first met that he wanted to invest in her company.

“While interested in her story of Galton and PWS and its cutting-edge weather-based technology, Riley did not express any interest in investing in the companies at the time.”

Riley said it was Bonk who repeatedly asked him to invest, and he finally agreed to give her $500,000.

And while Riley admitted the pair drove to Lake of the Woods, he denied he did anything sexually inappropriate and said he didn’t try to touch or kiss her.

Riley said the later meetings he had with Bonk were in connection with the total of $3.45 million invested by several people he knew, and his attempt to persuade her to divulge the company’s financial information.

He said all four resigned from the board in June 2018 after they were unable to secure financial disclosure. They have never received repayment of their investments.

In a 2015 Free Press story, Bonk would not disclose any details about the financial status of PWS, saying it would be looking to raise additional capital in the near future and “all I can say is that if we weren’t bringing in some revenue, we wouldn’t still be around.”

None of the allegations has been tested in court.

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