Bre-X is an huge outlier... first because the fraud was based in there being nothing there... which is actually quite rare... and only second because it got so big... which it did in large part because no one believed it possible that they would try to tell such a big lie...
There are thousands of "mineral exploration" companies in Canada that operate as "life-style" companies... lots more in the U.S. as pinksheets...
They never really seem to get anything done... but take a lot of money out of the market in not doing it... The primary purpose they serve... is to fund the life-style of the executives and promoters... and the financiers and stock brokers...
And, investors... as trading those stocks, if you know what you're doing... can make you a lot money... while, if you don't know... ? Yeah. They are "trades" and not investments... so you do also get the PnD and SnD issues with investors... manipulating, exploiting and harming other investors.
Lots of "serious" penny stocks that are not intrinsically scams, with well meaning people and not crooks as CEOs, still fail... for those reasons...
The annual total of $ lost to those things... probably larger than Bre-X... but if done on pinks or Vancouver exchanges... no one cares... only a few hundred or a few thousand lost $... so they bury the bodies as start over... There are guys who make careers out of scamming others "legitimately" and take price in it ?
All of those are also stock scams, that have no ability / intent to reward shareholders with successes ?
They're mostly NOT based on a scam in terms of there NOT being anything of value there ? Most have real value in solid enough assets... only have no real intention of succeeding ?
Instead, they take a REAL value, or potential value... promote it... get paid... and then fail to do anything useful to advance the property more than incrementally... The companies often wither and die... with the promoters keeping the properties for the real value they may have... which they get investors to pay to improve with no chance of investors winning a benefit. Rinse. Repeat.
Those guys... often can't AFFORD to succeed ? Success generates risks for them... that failure doesn't ?
I've seen junior gold miners go into production... making some gold... which never got sold... but just sort of "evaporated"... leaving the CEO a very happy stacker. What if that scam had gone on to succeed ?
I've seen junior oil producers... falsifying production reports to shareholders... and CEO's pocketing fairly large returns from successful wells the results of which they misreported to shareholders... but not to state taxing authorities... ?
Scams like those happen all the time... usually giving investors little reason to question the legitimacy of the operations... and, after they succeed in scamming investors... still no one will ever have heard of them ? But, they're a larger risk to most investors willing to their DD than scams like Bre-X... that were always "sketchy-looking" and unconvincing ?
A scam is far easier to run... if you have some REAL point of value to use as a lure and a distraction... to deflect investors attention away from the reality that matters... onto the value they will never realize ?
The regulators job... is to sweep the bodies off the floor... to prevent investors noticing them piling up ?
The regulators "protect" you... by removing completed scams from the market... while NOT preventing the same scammers from doing it all over again ?
But, as noted... an NYSE listing is not indication that there's any less risk of that... or other risks to your $ ?
Its an investors job to manage those risks...
In part by trading well and by not holding risks for very long,,, reducing your exposure to them ?
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