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Strategies & Market Trends : Canadian Options -- Ignore unavailable to you. Want to Upgrade?

To: Sleeperz who wrote (1018)	5/15/1998 1:50:00 AM
From: Adrian du Plessis	Read Replies (1) \| Respond to of 1598

Russian mafia godfathers linked to Magnex, Arigon, Arbat et al Earlier this year I began looking into YBM Magnex International, a most curious company listed on the Toronto Stock Exchange which had a market capitalization at that time of close to CDN $900 million. The company claims to be selling huge amounts of magnets in Russia, the Ukraine and Eastern Europe. Information readily obtainable from various European sources (including corporate registries, court files, press reports, and police intelligence reports), combined with data easily available in Canada, (from the Alberta Securities Commission, university libraries etc.), establishes that several core entities (e.g. Magnex Rt in Hungary, Arbat International in Russia, and Arigon Co. Ltd. registered in the Channel Islands) that were central at the formation of YBM Magnex were vehicles associated with godfathers of the Russian mafia. The two most notorious Russian mafioso to be associated with these entities are Sergei Mikhailov (sometimes anglicized as Mihailov, and nicknamed "Mikhas") and Semion Mogilevich (sometimes spelled Mogilyevich). Mikhailov is the acknowledged leader of one of Russia's largest and most dangerous criminal organizations, known as the Sons of Solntsevo (Solntsevskaya). Mogilevich, while closely associated with Mikhailov's group, heads his own criminal organization. Sergei Mikhailov has been in custody in Geneva, Switzerland since October 15 1996 held on charges of money laundering and being a member of a criminal organization. Semion Mogilevich still runs free. Their associates are now widespread. I had been preparing a series of articles, entitled "YBM Magnex: Securities industry due diligence in a post-Bre-X market", that highlights how Canadian mutual fund managers and brokerage analysts fail to properly concern themselves with the interests of public investors and the integrity of the marketplace. Welcome events of the past few days, including the cease trading of YBM Magnex stock by the Ontario Securities Commission, news of an investigation by the FBI, and disclosure of the refusal of auditor Deloitte & Touche to accept the company's financial statements as they stand, has altered the necessity and timing of publication of my series. I feel less urgency to proceed now knowing that the public is better protected. Consequently, my series on the failure of Canadian stock brokers and analysts, mutual fund managers and other industry players to investigate the origins of entities that they actively promote will continue after this Victoria Day holiday weekend in Canada. Best wishes for a healthy and happy future. For more on this story, and other stock market news and analysis, visit the Investigative Research & Analysis web-site at imagen.net

To: Sleeperz who wrote (1018)	5/18/1998 11:37:00 AM
From: Porter Davis	Read Replies (2) \| Respond to of 1598

>> Looks like the TSE gets another black eye... Well, you're right, CR, and on Friday they got another one that very few people outside the business well have seen, but it's a doozie. As you all know, Friday was expiry. Starting about 2:30 PM, the exchange through its clearing arm, the CDCC, stopped providing us with accurate positions for our trading. They didn't tell us, of course, but we're a little used to it inasmuch as it is the TSE after all. The problem came at 4 o'clock when it was time to exercise our in-the-money open positions. Guess what--they couldn't provide this to us! Now, I try to keep a running tally of my positions as I go, but you have to understand that the last hour before expiry is a very hectic time, especially when you have four active stocks. There is such a thing as automatic exercise, but for our mutual protection, I have a written contract with my clearing broker that only signed exercise notices submitted by me to them will be binding. Some of you with very long memories will remember the shameful way the TSE conducted itself when they made an oversight on HBO options about fifteen years ago and hung losses on some traders in the neighbourhood of $100,000. Friday the exchange said initially that nothing would be put through until Saturday morning (somewhat dodgy legal ground imo), then said we might be able to get confirmations by around 7PM Friday. Right. Miraculously my running tally turned out to be accurate, and I exercised exactly the right number of all my open positions, making me very grateful for the discipline I have forced on myself over the years to keep an accurate count. The main point here is it is inexcusable for the exchange to allow this continuing problem to exist, and to have it break down totally at expiry is a calamity. Somebody's head should roll for this, but it won't. I spent an interesting two hours Thursday talking with a senior business reporter from a national publication. He was a little surprised that I was willing to speak 'on the record' the whole time; heh, heh, he didn't know about this discussion thread we have going here. I'm on the record every time I post, why should the press be any different? Anyway, he seemed genuinely shocked to hear about the transformation the TSE has in mind for derivatives, turning it into a dealer market a la NASDAQ. He had not heard one word of it--and he's a senior correspondent on the Toronto beat. I think (and hope) he found this issue 'meaty' enough to write an article about it. I truly believe if the true investing public hears about this and can be made to understand what a huge step backward it is, it isn't too late to put a stop to this foolishness. The 'third column' and the OSC are the only possible courses of action left now that the TSE board has signed off on this. It still curdles my guts that the Public governors swallowed this swill without trying to grasp the impact it will have on the public. (Remember, this is only my personal, professional, 19 years in the trenches where the public meet the market, opinion.) Happy trading. Happy Victoria Day Porter E&OE