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Gold/Mining/Energy : GMD RESOURCE -- Ignore unavailable to you. Want to Upgrade?

To: P. D. who wrote (620)	2/10/1998 5:30:00 PM
From: Taylorm.	Read Replies (2) \| Respond to of 1030

This is a post on gmd resources from Jay Taylors gold stock hotline: COMMENTS ON VSE HALT OF GMD RESOURCES & LMX RESOURCES Trading has been halted on GMD Resources and LMX Resources by the Vancouver Stock Exchange. The trading halt resulted when Don Farrell reported to the Vancouver Exchange some non arms length loans made by GMD to LMX amounting to some C$2 million. According to his obligation to the VSE, Mr. Farrell was supposed to have sought approval for this transaction before it took place. For what ever it is worth, I will offer my opinion on the VSE halt and its handling of this issue. I have known Don Farrell since about 1982 and in fact, this weekend I visited him in Vancouver. In my opinion, he is as straight as they come in the sometimes slimy world of investment banking. He looks out for his shareholders very well, with a good conscience and he most certainly was not trying to deceive anyone including the VSE when he failed to gain their approval. I believe the VSE certainly has the right and obligation to enforce its regulations, but it seems to me it is way out of line when it punishes the shareholders of both companies by not allowing their shares to trade. I suspect is that the VSE's motivation, is not so much the concern for the shareholders of GMD and LMX as it is for its own members firms who sell stock in Vancouver. These people are the same fellows who underwrite public issues in Vancouver, then short those same shares with a most destructive vengeance. In some instances it is widely believed that some of these member firms elicit the help of a friendly newspaper writer (who employs lies, half truths and innuendo), to fix the market so that the shorts can cover after they have made a quick buck by violating the well being of the firms they underwrote. This is the seedy and unfair side of the VSE, but it is a way that some of these firms have made big bucks for a long time. It is also the reason that many companies that get their start in Vancouver, eventually go outside the VSE to raise money and why many companies eventually list their shares in the United States. It is this kind of treatment of companies and their shareholders that has prompted many Vancouver based companies to tell me over the years that this is why they have taken their shares off the VSE. Most people acknowledge that Vancouver is a good place to raise initial capital, but given the way companies are treated by the member firms thereafter, it is a place you want to get out of if you really intend to build a company. What the VSE and its member firms seem to do is keep the local companies dependent on them so they keep coming back for more financing, much as a battered housewife keeps coming back to the abusive husband. Step out of line a little and threaten the VSE/member firms with some financial independence and "Whammo", they let you have it from both ends. The get you on the IPO and then they rape you with short selling/market rigging scheme. The VSE's unspoken modus operandi appears to this writer to be "keep the listed companies dependent on financing so they can be recycled through the IPO/Short selling cycle time and time again". Don Farrell has, over the years proven he does not need to play that game. He has demonstrated an ability to raise serious capital outside the Vancouver network to the benefit of the shareholders. Perhaps that's what this latest hurtful action against shareholders of GMD and LMX is really all about. I suspect the exchange is punishing Don Farrell (and as a result shareholders) not because he has short changed shareholders, (they would be hard pressed to demonstrate how he has done that, nor do I believe they care) but rather because he has not co-operated with the Vancouver establishment's recycling schemes.