https://business.financialpost.com/
Felderhof was the only person to face formal charges in the infamous fraud, but was acquitted of insider trading and other securities violations in 2007
John Felderhof, the Bre-X geologist who played a central role in one of the biggest stock market scandals in Canadian history, has died. He was 79 years old.
Felderhof was the only person to face formal charges in the infamous gold mining fraud, but was acquitted of insider trading and other securities violations in 2007. The verdicts came ten years after the revelation that supposedly rich samples from Bre-X’s Indonesian mine had been “salted” with gold from outside the mine, a discovery that sent the miner’s high-flying stock into free fall.
Bre-X had a market capitalization of $6 billion at its peak, and the scandal shook Canada’s capital markets along with the country’s reputation on the global stage, as the supposedly enormous gold find had drawn interest from industry giants including U.S.-based Freeport-McMoRan.
Felderhof, the vice-chairman and chief geologist at Bre-X, had sold more than $80-million worth of his company’s stock in 1996, not long before the fraud was exposed and wiped out hundreds of millions of dollars in shareholder value.
He faced charges of insider trading and authorizing misleading news releases, but the judge in the case ruled that the tampering that affected thousands of core samples was sophisticated, and that Felderhof could have reasonably believed there was a large gold deposit at the Busang mine.
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