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Gold/Mining/Energy : Bre-X, What happens after Strathcona results?

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To: opalapril who wrote (17)5/5/1997 2:34:00 AM
From: Adrian du Plessis   of 31
 
Bre-X: no gold at Busang, but maybe a silver lining?

If any good can come of a scandal like Bre-X, it's to be hoped that it may lead to long overdue reform of Canada's junior securities environment. Regrettably, there's been little interest shown by Canadian market organizers in making an effort to deactivate the mine-field that threatens the average investor. It's too profitable for too many insiders. And in this investment age of the mutual fund bubble, the scams may be listed on the Toronto Exchange as well as those more familiar havens for fraud artists -- the ASE and the VSE. Rather than cleanup after outrageous scams, the history of these markets, however, suggests that it's more likely that industry insiders will move quickly to cover their own butts and try and claim the problem was exceptional and due to a small handful of "rogue" players or "bad apples" -- ignoring the actions of a myriad of brokers, analysts, officials etc. who contributed to the terrible disaster. As veteran stock promoter Murray Pezim candidly pointed out some weeks ago, Bre-X represents nothing more than a very old story with a couple of zeros added to it. The perpetrators of past salt jobs and stock scams have been allowed to remain active in Canada's junior markets -- encouraging these schemes to be repeated again and again. Will Bre-X's extra zeroes make any difference when it comes time to deal with the problems plaguing this sector of the financial industry? With the power of the mutual fund industry and an increasingly lame, and complicit, business press acting as dual forces propping up the con-artists and hypesters, one can only hope that the pattern of scams that has remained unchanged for decades may be altered in the wake of the Bre-X swindle.

For more on Bre-X, past Bre-Xs, future Bre-Xs and other market news and culture items visit the howenow website under construction @ imagen.net
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