Newspaper Name: Calgary Herald
Province: Alberta
Town(s) Served: Calgary and southern Alberta
Published: 03/28/1997
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The headline and decks said it all: Market mayhem, Bre-X shares lose $3.1 billion in minutes, TSE’s biggest one-day loss since 1987.
The rush to dump shares of the Calgary company was so frenzied that it caused the TSE’s computers to crash.
The market chaos detailed on the front page of the Calgary Herald on March 28, 1997, occurred after Bre-X’s chief geologist allegedly committed suicide by jumping out of a helicopter over a jungle in Indonesia. That was followed by rampant speculation that Bre-X’s discovery of what was billed as the world’s largest gold deposit was significantly overstated.
It turned out to be much more than that. It was a scandalous international securities fraud of huge proportions that affected people around the world.
“Not a lot of companies ever get a market cap of $3 billion,” Doug Leishman of Yorkton Securities in Vancouver commented in the article. “It sets a new benchmark when you can lose $3 billion in half an hour.”
As remarkable as the stock bailout was that day, it was only the beginning of a 17-year saga. Class-action lawsuits were filed as the extend of the massive fraud surfaced, costing investors hundreds of millions. Despite investigations in Canada and the U.S., no one was ever held to account. Bre-X Minerals Ltd. president David Walsh died in 1998 and geologist John Felderhof went to the Cayman Islands, denying all responsibility.