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Gold/Mining/Energy : BRE-X, Indonesia, Ashanti Goldfields, Strong Companies. -- Ignore unavailable to you. Want to Upgrade?

To: Walter who wrote (27840)	4/9/1998 11:24:00 AM
From: alan holman	Respond to of 28369

WONDERFUL NEWS: canoe5.canoe.ca Thursday, April 9, 1998 Judge hands big victory to Bre-X investors By SANDRA RUBIN The Financial Post An Ontario Court handed investors in Bre-X Minerals Ltd. an early victory yesterday, refusing to throw out huge parts of a class action lawsuit against insiders, brokerages and analysts for their role in the multibillion-dollar stock fraud. Defendants including Nesbitt Burns Inc., Bre-X exploration chief John Felderhof and chief executive David Walsh had been trying to have the suit whittled down in advance of any trial. Their lawyers argued in pre-trial hearings late in March the case against them was not properly pleaded. But in a decision last night, Judge Warren Winkler refused to grant their motions to dismiss key chunks of the suit, saying allegations of misrepresentation and conspiracy will stand. But he added some portions passed the test by a "mere whisper." "This is a superb result for us," lawyer Harvey Strosberg, who is leading the suit on behalf of investors, said from Scottsdale, Ariz. "All the defendants attacked everything and tried to get rid of everything. What the judge did is say, generally, the actions stand. The only element he struck out is breach of fiduciary duty." In his 39-page ruling, Winkler said Bay Street brokerages will have to answer to claims of negligent misrepresentation made by investors who say they relied on the brokerages' advice in buying Bre-X shares. TD Securities Inc., ScotiaMcLeod Inc., L‚vesque Beaubien Geoffrion Inc., Midland Walwyn Capital Inc., CIBC Wood Gundy Securities Inc., First Marathon Securities Ltd. and Nesbitt -- and their gold mining analysts -- have all been named in the suit. But Winkler made it clear the case against all of them is not equal. "The main action does contain a sufficient pleading to sustain the allegation of fraudulent misrepresentation as against Nesbitt Burns and [analyst Egizio] Bianchini, and against First Marathon and [analyst Kerry] Smith," he wrote. "In respect to the claim against ScotiaMcLeod, I have serious reservations. Taking into account the minimal threshold ... this claim is so scant as to only pass that test by a mere whisper." In a move sure to be welcomed by the brokerage community, Winkler threw out allegations investment advisers were in breach of fiduciary duty in recommending the stock. "None of the plaintiffs has pleaded any specific facts ... which could serve to elevate the brokers relationships above the status of information provider or order taker. "Nor are there any material facts which, if true, could support a finding of vulnerability on the part of the plaintiffs, or discretion in decision making on the part of the brokers." He also refused to uphold arguments by Walsh, Felderhof and Bre-X vice-president Stephen McAnulty that they cannot be sued in their personal capacity because they were acting as officers and directors of the corporation in issuing press releases suggesting the Indonesian strike was among the biggest finds ever. Winkler said the allegations, if proved, "are sufficient to attach personal liability to these defendants." But he did stay portions of the suit against Ingrid Felderhof and Nancy McAnulty, until the case against their husbands is resolved. Montreal-based SNC-Lavalin Group Inc. had part of the case against it dismissed last month, but will stand trial for breach of the federal Competition Act. SNC's Kilborn engineering subsidiary provided an independent resource estimate that supported claims of a massive find. Such calculations, which were widely disseminated by Bre-X, were materially false and misleading and therefore in breach of the act, the plaintiffs say.

To: Walter who wrote (27840)	4/11/1998 7:48:00 PM
From: Walter	Read Replies (1) \| Respond to of 28369

Friday, April 10, 1998 Lawyers squabble over best Bre-X target and venue By MICHAEL MACDONALD -- Canadian Press TORONTO -- Investors who lost billions in the Bre-X gold scam took a step closer to getting a piece of their investment back this week. But the Ontario court ruling that supports their class-action claim marks only the beginning of a very long, costly journey. "It opens the door just a little bit," said lawyer David Klein, who represents 300 former Bre-X shareholders in British Columbia. "But it doesn't open it completely because all that's been said is there's a possibility such an action could succeed." Klein's claim alleges Bre-X executives, investment dealers and analysts fraudulently made millions at the expense of misinformed Bre-X investors. "The primary targets in this case are the brokers, the analysts and the companies that did the mining analysis for Bre-X," said Klein. Calgary-based Bre-X and Bresea Resources, its holding company, are thought to have about $35 million in assets. But that wouldn't go far among investors who lost billions of dollars in stock value after claims of a huge gold deposit in Indonesia turned out to be the biggest hoax in mining history. On Wednesday, judge Warren Winkler refused to grant defence motions to dismiss parts of the Ontario suit, saying key allegations of misrepresentation and conspiracy will stand. One of the investment dealers named in the suit, Toronto-based Nesbitt Burns, issued a release noting the judge dismissed an allegation that brokers breached their fiduciary duty by recommending the stock. "You should never make a pleading and lose a portion of it," said Nesbitt lawyer John Campion. "That's whistling by the graveyard." Harvey Strosberg, the lawyer leading the Ontario lawsuit, said the Nesbitt team was just nit-picking. "They're trying to put the best possible spin on a bad result from their perspective," Strosberg said. Attempts at certifying similar class-action suits are also underway in Quebec and Texas. But Klein's case in B.C. is on hold until a Texas judge decides whether Canadian investors can join the U.S. litigation. Klein said he wants his clients' case heard in a U.S. court because they would be more likely to regain a larger share of their losses under U.S. law. But Strosberg says that's nonsense. "Mr. Klein is a hopeless optimist. This is a Canadian problem." Canadian law provides the best opportunity to win because the onus is on the Bre-X directors and brokerage houses to prove they weren't negligent, Strosberg said. "That's a huge difference in the law ... There's no equivalent in the States." Among those named in the Ontario suit: Bre-X exploration chief John Felderhof, chief executive David Walsh, TD Securities, ScotiaMcLeod, Levesque Beaubien Geoffrion, Midland Walwyn Capital, CIBC Wood Gundy Securities, First Marathon Securities and Nesbitt Burns. Many of the brokerages named are owned by Canada's big banks. "That's where all the money is," said Greg Chorny, an outspoken former Bre-X shareholder who also wants the Canadian cases shifted to the United States. "I predict that the Ontario case will not go ahead because people will sober up to the reality that the action is very speculative and risky one." BREAKING NEWS MARKET WATCH BIZ TICKERS MUTUAL FUNDS MONEY RATES BIZ SEARCH Bre-X fight in lawyers' hands Biovail bombs linked to fraud Markets brace for profit hit US puts tariff on Canuck lumber CANOE home \| We welcome your feedback. Copyright c 1998, Canoe Limited Partnership. All rights reserved. Please click here for full copyright terms and restrictions.