A Case of Fool’s Gold

Remember that Gold stock fiasco BRE-X? Almost 10 years after the BRE-X went belly up on the Toronto Stock Exchange the insider trading case against John Felderhof is about to come to a close.

Considering that BRE-X had rights what was supposed to be 200 million ounces of Gold (which would have been one of the largest if it actually existed) the stock soared. Gold was trading around $350 an ounce then, it’s climbed to double earlier this year and even with with some lost steam is about $630 now! Well it was too good to be true…

The Geologist credited with “the find”, Mike de Guzman, committed suicide or was “pushed” out of a helicopter shortly before the hoax was revealed. The BRE-X scandal started to hit the fan in March 1997. The ex-CEO of BRE-X died of a brain aneurism about a year later while he was in the Bahamas. John Felderhof, now living in the Cayman Islands, managed to escape criminal fraud charges up to now but the Ontario Securities Commision continues it case regarding his $84 million worth of stock he sold in 1996.

It will be interesting to hear how this pans out especially since this fiasco robbed investors of $3 billion!!! Even for most people investing their hard earned cash this story was long forgotten (but it shouldn’t be!) If more of these clowns actually pay the price for “peeing in the pool” you might actually see more people embrace the market. After ENRON and WorldCom and BRE-X the war on terrorists should continue…

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