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Fleecing The Lamb
The odds of losing on the Vancouver Stock Exchange during a twelve year period of the 1960's and 1970's were 84%. Five of every six investments were going sour.
"The evidence we've found since then," says David Cruise, co-author with Alison Griffiths of Fleecing The Lamb (D&M $24.95), "indicates the overall situation at the VSE hasn't improved."
Cruise and Griffiths, a husband and wife team, studied the history, the leading personalities and the profitability of .the VSE for a year and a half.
"The VSE is one of the most profitable enterprises on the face of the earth," says Cruise, "for those who own it." The VSE is owned and managed by 48 brokerage firms. The authors claim a comparable situation would be if the CTV network was allowed to own and operate the CRTC.
Because documentation of VSE affairs is almost non-existent for periods prior to the mid-1970's, and because files are far from complete even in the 1980's, it has been extremely difficult for either police or journalists to conclusively examine VSE affairs. Cruise and Griffiths were fortunate to get their hands on a comprehensive but hushed-up study, Public Financing of Junior Resource Securities in British Columbia, compiled by Michael Brown of Brown, Farris &Jefferson Ltd., covering a period from 1965 to 1978.
"The most stunning statistic these guys found," says Cruise, "was that of $1.2 billion raised through primary and secondary financing, only 51.3% made its way to the companies that it was raised for." Brokers took 27%, promoters took 13.8% and property vendors took 7.9%.
Some of the most profitable brokerage firms in the country operate in Vancouver. In 1980, says Cruise, Peter Brown's Canirim Investments had a net profit of $30 million. By comparison, Midland-Dougherty, a much larger national firm with head offices in Toronto, had a national profit of $16 million.
Peter Brown, a former VSE president, is profiled in Fleecing the Lamb, along with Murray Pezim, Morris Black, Egil Lorntzsen, Norman Keevil, Bruce McDonald (current VSE president), John McGraw (VSE director for 34 years) and the VSE's legendary first promoter, Alvo von Alvensleben (rumoured to be a German spy who amassed $25 million and lost it).
"I hope people will find the book critical in the best sense of the word," says Cruise, who grew up playing the stock market from Victoria, "We're not taking a close-it-down attitude. We simply feel that too much of the profit is going to the people who own the exchange.
"The VSE could be a lot more efficient. It could be an enormous engine of economic activity. But as it is too many of the ideas or companies are floated because they're sexy, because they'll sell well."
The authors claim excellent regulations exist to control the Exchange and its often flamboyant figures -such as arms dealer Adnan Khashoggi -but there is inadequate enforcement. The Superintendent of Brokers, the government agency in charge of policing the VSE, is underpaid and undermanned.
Fleecing the Lamb and Jimmy: An Autobiography will be the two most talked about B.C. books on business. Business Etiquette Today (Self-Counsel $7.95 tent.) by Jacqueline Dunckel could be the most useful. The new book covers everything from how to hold your soup spoon to sexual conduct around a conference table.
[BCBW Spring 1987]
"The evidence we've found since then," says David Cruise, co-author with Alison Griffiths of Fleecing The Lamb (D&M $24.95), "indicates the overall situation at the VSE hasn't improved."
Cruise and Griffiths, a husband and wife team, studied the history, the leading personalities and the profitability of .the VSE for a year and a half.
"The VSE is one of the most profitable enterprises on the face of the earth," says Cruise, "for those who own it." The VSE is owned and managed by 48 brokerage firms. The authors claim a comparable situation would be if the CTV network was allowed to own and operate the CRTC.
Because documentation of VSE affairs is almost non-existent for periods prior to the mid-1970's, and because files are far from complete even in the 1980's, it has been extremely difficult for either police or journalists to conclusively examine VSE affairs. Cruise and Griffiths were fortunate to get their hands on a comprehensive but hushed-up study, Public Financing of Junior Resource Securities in British Columbia, compiled by Michael Brown of Brown, Farris &Jefferson Ltd., covering a period from 1965 to 1978.
"The most stunning statistic these guys found," says Cruise, "was that of $1.2 billion raised through primary and secondary financing, only 51.3% made its way to the companies that it was raised for." Brokers took 27%, promoters took 13.8% and property vendors took 7.9%.
Some of the most profitable brokerage firms in the country operate in Vancouver. In 1980, says Cruise, Peter Brown's Canirim Investments had a net profit of $30 million. By comparison, Midland-Dougherty, a much larger national firm with head offices in Toronto, had a national profit of $16 million.
Peter Brown, a former VSE president, is profiled in Fleecing the Lamb, along with Murray Pezim, Morris Black, Egil Lorntzsen, Norman Keevil, Bruce McDonald (current VSE president), John McGraw (VSE director for 34 years) and the VSE's legendary first promoter, Alvo von Alvensleben (rumoured to be a German spy who amassed $25 million and lost it).
"I hope people will find the book critical in the best sense of the word," says Cruise, who grew up playing the stock market from Victoria, "We're not taking a close-it-down attitude. We simply feel that too much of the profit is going to the people who own the exchange.
"The VSE could be a lot more efficient. It could be an enormous engine of economic activity. But as it is too many of the ideas or companies are floated because they're sexy, because they'll sell well."
The authors claim excellent regulations exist to control the Exchange and its often flamboyant figures -such as arms dealer Adnan Khashoggi -but there is inadequate enforcement. The Superintendent of Brokers, the government agency in charge of policing the VSE, is underpaid and undermanned.
Fleecing the Lamb and Jimmy: An Autobiography will be the two most talked about B.C. books on business. Business Etiquette Today (Self-Counsel $7.95 tent.) by Jacqueline Dunckel could be the most useful. The new book covers everything from how to hold your soup spoon to sexual conduct around a conference table.
[BCBW Spring 1987]
Submitted on October 25, 2004 in By David.
