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TORONTO — Joe Groia, perhaps the best-known securities lawyer on Bay Street, enjoys a maverick reputation he owes largely to his biggest case: His successful defence of John Felderhof, the geologist at the centre of the Bre-X gold fraud that rocked Bay Street in the 1990s.
The Bre-X affair has long since faded into history – but not for Mr. Groia. The case that defined his career remains very much a present-day preoccupation.
Wearing a jacket and tie with faded jeans and gesticulating over a half-plate of orecchiette at Oro – a downtown Toronto Italian restaurant where he had a party after his wedding 25 years ago – he tells of how his link to the Bre-X saga began, recalling a promise he made to Mr. Felderhof that things would turn out all right.
Back in 1997, the geologist was under a cloud of suspicion after faked gold-drilling results from Indonesia caused stock in his company, Bre-X Minerals Ltd., to crater, costing investors billions. The Ontario Securities Commission, the U.S. Securities and Exchange Commission, the RCMP and the FBI were all on the case.
But over drinks in the Cayman Islands, where Mr. Felderhof then lived, Mr. Groia told his client he would find a way out of it all.
“I said: ‘John, I don’t know how this will end,’ ” Mr. Groia says. “But I can promise you that I’ll get you home safe, somehow.’ ”
He did get Mr. Felderhof home safe, winning him a stunning acquittal in 2007 on insider trading and other securities charges after perhaps the most controversial white-collar crime trial in Canadian history.
Mr. Felderhof, who maintained his innocence throughout, was free, although his reputation never recovered, and he now lives in the Philippines.
Close to 14 years after the epic trial began, with a bit more salt in his salt-and-pepper beard, only one player in the Bre-X drama faces any official sanction: Mr. Groia himself.
In a much-watched fight in legal circles, he has been waging an all-out war against allegations that his courtroom behaviour violated the legal profession’s rules on “civility.”
During the trial, Mr. Groia repeatedly and relentlessly attacked OSC prosecutors, accusing them of misconduct for allegedly trying to convict his client “at all costs.” He used what one judge called “unrestrained invective” as heated battles erupted over the use of various documents and other procedural issues and effectively paralyzed the trial.
Mr. Groia accused his opponents of laziness, threatened to call the chairman of the OSC as a witness, and engaged in what one judge called “guerrilla theatre.” At one point he said the OSC’s “promises aren’t worth the transcript paper they are written on,” calling a prosecution proposal on a procedural dispute “nonsensical.”
Mr. Groia acknowledges that his behaviour wasn’t perfect. But he argues his attacks on the prosecution were justified and did not break any rules. And he says that the Law Society of Upper Canada should leave policing courtroom behaviour to the authorities best placed to do so: judges. In his case, he points out that the trial judge, Peter Hryn, never complained.
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