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Gold/Mining/Energy : BRE-X, Indonesia, Ashanti Goldfields, Strong Companies.
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To: BRH who wrote (17581)4/25/1997 6:07:00 PM
From: julius diamond   of 28369
 
To All:

"Strathcona doesn't see Final Report differing from first one."

That Headline cost a lot of investors a lot of money. The Headline:

1. Is Misleading;
2. does not convey the substance of the body of the text; and,
3. was issued at an inappropriate time because it did not allow time for corrections.

At 3:34 P.M. Dow Jones issued the headline and Bre-x was trading at $3.50. The stock started to drop immediately after the headline was released and after approximately 10 minutes the stock hit a low of $2.50.

A large number of investors interpreted the "first one" to mean Freeport's first report of "no Gold" at Busang. Hence, panic.

Given the extremely sensitive nature of the Bre-x situation you would have expect diligence on the part of the Dow with respect to any news release about the subject. Not only was diligence not demonstrated, but also it appears that the Headline did not convey the material facts of he release. The question has to be asked why did the Dow release a Headline that was immaterial to the main substance of the news, late in the day? Regardless of the answer, many people suffered large losses directly related to the Dow news release. The Dow is culpable.

I am angry that we can no longer rely on the services, which we believed to be unbiased and careful in their reporting. The only way that these services will take due precautions not to publish inappropriate information is if there are severe penalties associated with irresponsible reporting.

I am not a lawyer, and I don't know the procedures or what is necessary for class action suits or the relative chance of success against a news agency. But if anyone is interested in picking up the ball and getting a class action suit going, I would be supportive. Everyone who owned Bre-x or Bresea was effected. Let's try to make the press responsible for their actions.
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