Bre-X: Kool-Aid protest
It had all the elements of a great novel: a dramatic rags to riches story, a mysterious suicide (or was it murder?) and a scandalous international fraud. But the Bre-X saga wasn't fiction — much to the chagrin of the many who lost money in 1997. Thousands of investors were duped by the small Calgary-based mining company that falsely claimed to have struck gold in Indonesia.
In this CBC News clip, Holman says his tongue-in-cheek demonstration is "all about little people standing up against big-scale corruption." Even after he's been asked to move off of Bre-X property, he continues - he simply sets up his stand on the sidewalk instead.
• While Holman's satirical protest was attention grabbing, other shareholders showed their discontent in more serious ways - including launching class-action lawsuits.
• A high profile "mega-suit" was launched by thousands of defrauded American investors represented by 15 law firms in Texarkana, Tex. It began in March 1998. By the beginning of 2004, the results were still pending.
• Other class-action suits were launched in Canada as well. There was one on behalf of all Canadian investors in Windsor, Ont., and there were several other suits for investors in Alberta, New Brunswick and Vancouver. Some class-action suits have tried to throw non-Bre-X players into the mix, including analysts, engineering firms and regulatory bodies that allowed Bre-X to trade. As of 2004, some of these suits have fallen by the wayside and some are still pending.
• One major class-action suit was settled in 2000. Bre-X's sister company, Bresea Resources Ltd., was ordered to pay $10 million to Deloitte & Touche, the company in charge of dealing with Bre-X's bankruptcy, as part of an overall effort to help victims recover their losses.
• Private investors weren't the only ones to lose big. Numerous Canadian pension funds were also victims of Bre-X. The Ontario Teachers Pension Plan reported losses of about $100 million, and the Ontario Municipal Employees Retirement System (OMERS) lost $45 million. The Caisse de depot et placement du Québec, Quebec's major public pension equity, lost $70 million. And on the East Coast the amalgamated Halifax Regional Municipality saw almost $1.5 million of its pension fund money disappear.
• Several universities also lost money in Bre-X's collapse, including the University of Victoria (which lost $1 million) and Memorial University in Newfoundland (which lost roughly $800,000).
• Citizens of the small town of St. Paul, Alta. - which grabbed media attention in 1996 for its high proportion of Bre-X millionaires - were surviving, but definitely felt the sting after Bre-X crashed. A Canadian Press story followed up with the town in 2002. The story quoted one man who had to work well beyond his planned retirement date because of his Bre-X losses. "Sure it hurts," he said. "You lose half a million dollars, doesn't that hurt?"
Program: Calgary News
Broadcast Date: May 6, 1997
Guest(s): Lorne Holman
Reporter: Bob Nicholson, Annie Chirka, Mike Spenrath
Last updated: April 18, 2013
Page consulted on December 6, 2013
All Clips from this Topic
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Residents of St. Paul, Alta., strike it rich with Bre-X investments.
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Venture finds out what Canadians are thinking about Bre-X.
It was definitely fraud, says an independent auditing firm.
One Calgary man is protesting Bre-X corruption in his own unique way.
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The founder and CEO of Bre-X passes away at the age of 52.
There's a new "action plan" to improve investor confidence.
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Investors panic when scandal rocks the small Calgary-based mining comp...
It had all the elements of a great novel: a dramatic rags to riches st...