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Vancouver Stock Exchange: Scam capital of the world (1989) [pdf]
- andy99 1y agoThis is new to me, it probably was a scam, but the part about Investors lose 84% of their money some of the time and all of it 40% of the time is meaningless. This could easily be true for many venture investments, which is how this exchange is presented. High risk investment is not the same as a scam.
- xmprt 1y agoThere is a real difference though. Individual investments might lose all their money but as an aggregate VCs make money by investing in dozens or hundreds of companies. No VC is losing all their money across all their investments but that's what this article is claiming happened to investors on VSE.
- Ekaros 1y agoSome number of VC with some certainty are losing all their money. But you just don't hear from them anymore.
- cindyllm 1y ago[dead]
- kristianp 1y agoReminds me of small mining exploration companies in Australia's ASX. Most only exist to pay for the directors' lifestyles.
- api 1y agoIsn’t there this whole weird economy of empty pink sheet companies that just act as lifestyle funding for people?
- dfedbeef 1y agoIf by lifestyle funding you mean money laundering and tax write-offs. Have a bunch of legal-or-otherwise income? You need one person in a suit who can register a company and shuffle paper around. A bunch of retirees or something somewhere paid $1 each to your company. They even paid in cash. Hooray. Now you are a successful legal business person minus the filing fee. Now, you're so successful you don't want to pay taxes or get audited. Your business made N dollars this year. You spent it all investing in some long term investment on paper. Damn, your businesses didn't make money now. No taxes I guess, takes money to make money. Hopefully that long term investment in several shell companies in different jurisdictions works out. Hopefully law enforcement isn't resourced enough to track it down. Who suffers? Literally everyone else who pays into a system that's supposed to be fair. There's a tipping point where no people who make money pay into it. I suspect this has kind of already occurred tbh.
- decimalenough 1y agoHow does that work? Is there anything you can point me to where I can read more about this? I, naively, would have assumed that publicly listing your company would be anathema if you're up to sketchy shenanigans.
- kristianp 1y agoThere's a brief discussion here: https://www.reddit.com/r/geology/comments/jnqqym/fraudulent_mining_companies/ https://www.reddit.com/r/geology/comments/jnqqym/fraudulent_...
- FloorEgg 1y agoI've raised from angels in Vancouver. There is definitely a VSE hangover culture there. During the grind I had some strange experiences. One involved an argument with the prospective investor over the share price. In their view it had to be between 20 and 50 cents. They didn't care about the valuation, or typical investment terms, only the share price. Another invited us to an IPO party for another company they invested in (TSX if I remember correctly). At this party we learned that the company that IPO'd had less than 100k revenue (and huge losses). They were out of business within 3 years. I guess it is hard for old dogs to learn new tricks... They made their millions off pump and dumps in VSE days and just didn't stop playing those games even long after the exchange shut down.
- bryanlarsen 1y agoIt wasn't shut down. It's now the TSX Venture Exchange.
- FloorEgg 1y agoThat explains a lot...
- adastra22 1y agoSounds like the crypto world.
- ttul 1y agoSome of the best crypto scam companies were born in Vancouver…
- Joel_Mckay 1y agoIn general, the Vancouver culture is very different from most places, and not recommended for small firms serious about growth (even with revenue over $4m you should talk with AMCHAM to figure out an exit-to-grow strategy.) No other "Angel Investors" typically ask people to table personal assets for deals. It is actually an absurdly risk-averse place, with predatory VC terms often far worse than simple bank loans. Vancouver has all the same problems as New York, but none of the advantages. Better options exist unless your business is rocks, logs, or crime. =3
- FiatLuxDave 1y agoMy Dad lost my college fund in the 1980s investing in the gold mining penny-stocks on the VSE. Fun times.
- morkalork 1y agoMy dad lost my sibling's college fund in the dotcom bust! Some things never change..
- missedthecue 1y agoLow listing standards means all the frauds and trash will congregate there. The AIM market in the UK has a similar reputation.
- ylee 1y agoWhen I started at Goldman Sachs, I was told early on of an "Israeli discount" and "Canadian discount"; that is, investors were more skeptical of companies based in those countries. I was not told of any more details than that at the time, but I now wonder if the VSE contributed to this?
- yieldcrv 1y agoVancouver still functions at least as sketchy plumbing for the US financial system I don't think there is any regulator quirk or shielding from doing it up there, people up there just do it
- cperciva 1y agoregulator quirk There is, sort of, but it's a constitutional quirk. Securities regulation is, for weird historical reasons, a matter of provincial jurisdiction; past Federal governments have said "hey look this is stupid let's just merge the regulators so we can do one good job instead of 10 bad jobs" but politics got in the way. If the US SEC were replaced by 50 per-state SECs, you'd probably see Alaska or Wyoming becoming the scam capitals because they lack the resources to properly regulate.
- gucci-on-fleek 1y ago> If the US SEC were replaced by 50 per-state SECs, you'd probably see Alaska or Wyoming becoming the scam capitals because they lack the resources to properly regulate. Sure, but BC is 10× the population of Wyoming, so that's not really the best comparison. Plus, Delaware is tiny, yet their business regulations are fairly strong.
- yieldcrv 1y agoI was referring to the US SEC and DOJ, they will easily establish jurisdiction against anyone touching US markets in some way, anywhere in the world Including Vancouver (The US has state level securities regulators too, but they are redundant, weak and almost defunct, but they still exist in every state.) There is no obvious benefit to being sketchy in BC aside from many things are legal in the US, it’s just a matter of convincing investors to invest I guess there’s just a sketchy network up there
- numpy-thagoras 1y agoSketchy and Vancouver go hand-in-hand. I live and work here. I play it straight and do my best. However, the culture here pushes for a lot of sketchy things, often to make up for lack of productivity or some other deficiency.
- Animats 1y ago1989. The good old days, before blue-sky scams went mainstream.
- lutusp 1y agoOn the topic of low-quality investments, there should be a posting rule that HN submissions consist of text, not pictures of text, so readers can search for additional information by copying text, not images. Nothing is more frustrating than an image-based PDF masquerading as text, especially now that, with little time or effort, OCR can convert most images into text documents.
- thomassmith65 1y agoIt's not my site but I'm the one who posted it here. The nice thing about a scan (if it's good quality) for an old article like this is it viscerally provides some context (eg: the era and type of publication). The scan quality here is abysmal, and for that I do apologize.
- gostsamo 1y agoas someone blind, there is one more reason to consider image based pdf-s undesirable. OCR works okayish most of the time, but it tends to suck when it does not and if the layout of the scanned page is complex, the output often breaks down. Not to mention that the friction of converting it is a disincentive to bother.
- leoh 1y agoI would rather something interesting without OCR is posted that not at all, especially if an OCR version is not available.
- dh2022 1y agoThis image-based PDF made my morning. I wish journalists would write like this these days, as opposed to jamming their reports through an LLM.
- unixhero 1y agoThe writing and insights is 10/10. Would enjoy more of this
- Tiktaalik 1y agoEven though the exchange has become the TSX Venture exchange, Vancouver remains the centre for junior mining companies, of the sort where scams are common. I used to work in Downtown Vancouver and would on occasion get my haircut at a downtown barber frequented by office workers all around, and those barbers were a wealth of knowledge about the latest gossip from shifty junior miners and whatever they were into, which was increasingly not mining, but trendy startups. Funny thing was when I was working in the area mining was going through a bit of a downturn, so a lot of the junior miners were shifting into other hot things they could fundraise for, like cannabis and crypto. From scam to scam to scam. I stopped working downtown so stopped getting the gossip but I presume they swiftly pivoted to NFTs and onto whatever flakey thing they could still dubiously attach a .ai domain to.
- btown 1y agoI assume you’re referring to crypto mining, but the mental image of handlebar-mustachioed ore miners gossiping in Vancouver barber shops about how to scam investors with their shaft-digging operations is quite hilarious to think about! Pickaxes must be left at the door after the Incident.
- dghlsakjg 1y agoHe’s actually talking about guys banging on rocks looking for gold. So to speak. My dad is involved in junior mining projects (geology, not gpu), and, yep, Vancouver is where you go to find these sorts of things, legitimate or not.
- xmprt 1y agoMy first thought was ore mining before crypto mining. I think I've recovered from the days of crypto induced mania where every other article on Hackernews was cryptocurrency related.
- defrost 1y agoEnergy (oil & gas) and Resources (mining) have some serious scams, minor coup d'états, and no shortage of the not so funny. Common low level scams such as falsifying assay results from ground and bore hole samples are just the beginning. More questionable scams tap dance about questions of who really owns or controls resources, who can be paid off, and how to bury money spent greasing wheels by various means. In mining, you'll often see events such as: * https://www.business-humanrights.org/en/latest-news/australian-mining-company-in-prosecution-spotlight-for-role-in-congo-massacre/ https://www.business-humanrights.org/en/latest-news/australi... * https://www.theguardian.com/australia-news/2024/nov/18/resolute-mining-to-pay-247m-to-free-ceo-terence-holohan-and-executives-detained-in-mali https://www.theguardian.com/australia-news/2024/nov/18/resol... Multiple sides to both these events.
- grod423 1y agoTo some extent, you see a similar dynamic happening on the ASX (Australian Stock Exchange) to this day. Plenty of mining companies that purchase the rights to explore for resources in some African territory with questionable governance concerns that serve as shells for directors to cash in fees. Lots of biotechs with similar track records there too. The saying still holds, a mine is a hole in the ground with a liar standing next to it.
- DuckConference 1y agoOne of the famous small canadian mining companies that went under was named something like Bre-X, somehow a lot of members of the general public had shares of it so it was a big scandal on the news when it went under. Also as it was unraveling a whistleblower at the company "fell" from a helicopter in indonesia, I don't recall if anyone was ever charged or convicted for that. EDIT: Oh damn it was far sketchier than I recalled and he wasn't a whistleblower. From wikipedia: The fraud began to unravel rapidly beginning on March 19, 1997, when Bre-X geologist Michael de Guzman reportedly died of suicide by jumping from a helicopter in Indonesia.[11][12] A body was found four days later in the jungle, missing the hands and feet, "surgically removed".[13] In addition, the body was reportedly mostly eaten by animals.[14] According to journalist John McBeth, a body had gone missing from the morgue of the town from which the helicopter flew. The remains of "de Guzman" were found only 400 metres from a logging road. No one saw the body except another Filipino geologist who claimed it was de Guzman. One of the five women who considered themselves to be his wife was receiving monetary payments from somebody long after the supposed death of de Guzman.[13]
- Fade_Dance 1y agoBBC has a good audio series on this: https://www.bbc.co.uk/programmes/w13xtvt4 https://www.bbc.co.uk/programmes/w13xtvt4 Granted, it's a bit drawn out, but certainly is a memorable story that perfectly encapsulates speculative behavior at every level.
- cheraderama 1y agoThanks to you I'm already 2 episodes in and they say Bre-X was traded initially at Alberta SE and then Toronto?
- sheepscreek 1y agoTruth is stranger than fiction…
- skytwosea 1y agoI was born and raised in Vancouver, and have deep personal ties to the junior mining industry - I worked for two decades as an exploration geologist, and my Dad has been in the industry since the early 1970s. Bre-X was brutal. I was barely into my teens, but I recall - and have spoken at length with my Dad and many others - about how he was out of work for several years after the scandal. Investment completely dried up. Industry recovery took years, and was accompanied by the implementation [1] of fairly stringent disclosure rules, which define reporting standards to this day. Nonetheless, scams are still commonplace, and pretty much everyone I know has a story or two of a shifty promoter pulling the rug out. Mineral exploration is a tough business. You can't just sudo apt install a drill rig! The logistics and expense of even small exploration programs are a bit insane. Crews head out to some of the most remote corners the world has to offer, moving hundreds of thousands to millions of dollars of heavy equipment, fuel, food, and camp gear on to site for just a few months of near-constant work, then moving (hopefully most of) it out again. Hundreds of tons of rock and soil samples are collected, by drilling, by walking the ground, by trenching; these samples are shipped out to processing and assay labs. Some properties have the benefit of road access - deep-wilderness, often decommissioned logging roads - but many are accessible by helicopter only. It's an adventure, but it is also very demanding and taxing. There is very little year-to-year consistency, even in bull markets. Sixty to seventy years ago, the majors - mining companies with actual mines and annual revenue - did the lion's share of exploration work. Over the years, however, the majors have divested almost entirely from risky grassroots exploration, leaving it almost entirely up to junior explorers who must raise their capital from investors. There are lots of fascinating tales: - How to Get Rich in a Gold Rush: https://youtu.be/yW5iGLLgzRc?si=Pk_9eZF0vBEjF2f4 https://youtu.be/yW5iGLLgzRc?si=Pk_9eZF0vBEjF2f4 two-part youtube documentary on the VSE - Gold: https://en.wikipedia.org/wiki/Gold_(2016_film) https://en.wikipedia.org/wiki/Gold_(2016_film) great movie starring Matthew McConaughey, loosely based on the Bre-X scandal - The Big Score: https://www.goodreads.com/book/show/2370656 https://www.goodreads.com/book/show/2370656) excellent book that covers the story of the Voisey's Bay discovery in Labrador - Fire Into Ice: https://www.goodreads.com/book/show/1166624.Fire_into_Ice_Charles_Fipke_the_Great_Diamond_Hunt https://www.goodreads.com/book/show/1166624.Fire_into_Ice_Ch... - Barren Lands: https://www.goodreads.com/book/show/22322947-barren-lands https://www.goodreads.com/book/show/22322947-barren-lands [1] https://www.cim.org/news/2019/how-cim-helped-an-industry-rocked-by-scandal-get-back-on-the-level/ https://www.cim.org/news/2019/how-cim-helped-an-industry-roc...
- charles_f 1y ago> the nost respected fiction authors in Canada are Margaret Atwood and Robertson Davies, but no-one churns out a body of fiction as consistently high a quality as the companies listed at the VSE That line got me chuckling.
- sbfeibish 1y agoI've invested in junior mining stocks. The rare earths are hot right now (12 Oct 2025). As a whole the group is supposed to lose money every year. It's just a question of will they lose a little or a lot. I see people rushing in right now because China is restricting the export of rare earths. They don't know the flaws these companies have. But they will :)
- nextworddev 1y agoIt’s all just a narrative needed to pump & dump. Including AI
- anonu 1y agoFun piece of writing. Well written. This still goes on today, to some extent, with the TSXV venture exchange. Listing standards are low and many mining companies go here to raise speculative capital. There are some successes, diamonds in the rough, so to speak.