Off Topic but may be worth while e-mailing some of these people. They must be taught not to under estimate the power of the web.
To: +the Chief (0 )
From: +robert kalb
Wednesday, Dec 1 1999 11:44AM ET
Reply # of 25967
The New CDNX: restoration of a traditional predator-prey system?
by John Kaiser
The Vancouver and Alberta Stock Exchanges have merged to form the Canadian
Venture Exchange, or CDNX for short. There has been much media talk about how
CDNX will be able to compete on the global stage by offering strong regulation and
transparency. I have been among those quoted by the media as espousing this view.
Unfortunately, I have an ominous feeling that I may be mistaken. While checking out the
new CDNX web site (www.cdnx.ca), I discovered that CDNX has abandoned the
long standing VSE policy of publishing details about corporate transactions that involve
the creation of paper. This decision has apparently been made by Gerry Romanzin, the
new head of CDNX corporate finance who was the former executive vice president of
the Alberta Stock Exchange. As you know, the ASE steadfastly resisted suggestions to
adopt a VSE style of disclosure, and in the process helped investors lose extraordinary
amounts of money through disasters like Cartaway, Timbuktu and YBM Magnetics that
would have been nipped in the bud by VSE style disclosure. The information which
CDNX is now planning to keep internal to the exchange is important because it alerts
investors to possible conflicts of interest within the brokerage industry, and it lets them
see the degree of stock dilution in the form of options, warrants, convertible debt and
asset related contingent stock issuances. This information was traditionally picked up
and retransmitted by Market News and Canada Stockwatch, the only news vendors
that do justice to the Canadian junior markets in terms of detail and universal coverage.
Their news feeds are picked up by a number of financial web sites that specialize in
Canadian listings. The loss of this information thus affects more than a few people like
myself for whom it is critical research material. A key frustration that I have had with the
ASE is that there was no way of knowing what financings or transactions had closed,
who was involved, and what the true full dilution was for an ASE listing. CDNX has
adopted the VSE daily bulletin notice system, but to stop publishing the corporate
transaction details somebody had to go out of their way to make this happen. The
discouraging implication is that the new CDNX is nothing but a clone of the ASE, and
that the merger was contrived by the brokerage industry as a way of getting back the
business that fled to the OTC Bulletin Board. If this attempt to shroud the corporate
transactions of CDNX listings prevails, there will be little reason to prefer the Canadian
junior market over American equity markets. Any regulator who claims to have the
ability to protect investors is a fool or a liar. If investors in Canadian juniors are to avoid
becoming prey for predatory brokers and promoters, they need to use their own brains
to supplement regulatory efforts. And if the information investors need to assure
themselves that they are dealing with a fair playing field is not available, the smart thing
will be to steer clear of predator-prey systems where they are the prey. This "little thing"
is symbolically a "big thing" that would be easy to fix if CDNX is truly interested in being
the best regulated and most transparent venture capital exchange in the world. If you
believe CDNX is making a big mistake in cutting back its disclosure policies, please
contact any or all of the CDNX directors I have listed below and let them know what
you think.
William Hess (CDNX President): whess@cdnx.ca
Dennis Burdett (CDNX Chair, Canaccord): dennis_burdett@canaccord.com
Ian Brown (CDNX Co-Vice Chair, Goepel): ian.brown@goepelmcdermid.com
Scott Paterson (CDNX Co-Chair, Yorkton): spaterson@yorkton.com
Wiley Auch (First Energy): wdauch@firstenergy.com
Chris Lay (CIBC): lay@cibc.ca
John Hagg (Northstar Energy): johnh@northsnrg.com
Norman Thompson (Union): nfthompson@union-securities.com
Deborah Weinstein (LaBarge Weinstein): dw@lwlaw.com
John Anderson (Anderson Expl): andersj@axl.ca
Mary Macdonald (Macdonald & Assoc): mmacdonald@canadavc.com
Alain Auclair (Scotia Capital): alain_auclair@scotiamarkets.com
John McCoach (Yorkton): jmccoach@yorkton.ca
Ian Beddis (RBC): ibeddis@rbcds.com
John Brock: jsbrock@istar.ca
Gordon Medland (Goepel): gordon.medland@goepelmcdermid.com
Sesto DeLuca (Latimer): drdyp@wdlatimer.com
James Sorenson (Merrill Lynch): jim_sorenson@ca.ml.com
Harry Jaako (Discovery Capital): hjaako@discoverycapital.com
John Wells (National Bank): jwells@isiedm.com
Feel free to forward this part about CDNX to anybody or post it anywhere on the
Internet. |
