Bre-X Revisited - Justice System & Enforcement Failings

Several years ago two small investors took BMO Nesbitt Burns to court over Bre-X. Bre-X was billed as "Scam of the Century" and I predicted the trial would be media event of the century. The first day of the trial two Ottawa evening papers covered the trial. Fascinating reading.

The next day nothing appeared in the Toronto papers and then nothing further appeared in the Ottawa papers. The trial continued unreported. Who was responsible for the cover-up?

Most Canadians suffered some degree of loss from Bre-X through direct ownership or mutual funds, yet the media was strangely silent.

Eventually an out of court settlement was reached and the caper covered up.

A decade late the trial of Felderhof is getting more coverage. He is small fry. The banks however are not small fry. When RBC pays $2.6 billion to settle with U.S. regulators to cover up their wrongdoing, one can only wonder.

Now the OSC is concluding its case against Felderhoff. The charge is insider trading. Big Deal.

The Bre-X caper is fraud. This is criminal. The chief geologist doesn't know? He loots $90 million and investors are left holding the bag. Just who is providing investor protection. Ah yes, the Investment Dealers Association.

Canada's justice system and securities enforcement are a joke!

Felderhof faces a maximum of two years in jail and a fine that will pale in significance to the millions he made from this fraud.

At least they could do would be hand him a severe sentence a la Coffin. They could pair him with Coffin as a duo on a speaking tour to talk about ethics to business students. That would certainly teach them a lesson and encourage the next generation of financial predators.

We need to speak out about our inadequate enforcement that fails to deter crime, and our justice system that seems to reward white collar criminals by allowing them "to pay their debt to society" and enjoy the proceeds of their crimes while the victims are left to try to pick up the pieces of their shattered hopes and dreams.

These white collar predators are destroying the wealth and lives of small investors.

Bring back capital punishment and hang them.