Reports say OSC chief did legal work involving Bre-X
Monday, October 30 2000 - 04:00 AM WIB
The Ontario Securities Commission should have disclosed that its chairman, while in private practice, had done some legal work involving Bre-X Minerals Ltd., a lawyer for former Bre-X geologist John Felderhof said, newspapers reported.
At Felderhof's trial on OSC charges of illegal insider trading and issuing misleading press releases, Felderhof's counsel Joseph Groia revealed a letter David Brown, the OSC's chairman, wrote the president and chief executive of JP Morgan Canada while he was a partner at Davies Ward & Beck.
Brown's letter, written on Jan. 16 1996, told JP Morgan that the law firm found no evidence that three Bre-X officials, including Felderhof, had been "involved in questionable dealings in the past," papers said.
Brown left the law firm to become chairman of the OSC in April 1998.
A year later Brown signed an order giving OSC staff permission to file charges against Felderhof.
Groia said he was not suggesting any wrongdoing on Brown's part, but that he was trying to demonstrate to the court that the OSC had failed to properly disclose many documents and pieces of information - including the letter - that are relevant to the defense team.
Groia is trying to have the charges against Felderhof thrown out on the grounds the OSC's disclosure was so inadequate that it has compromised Felderhof's ability to mount a full defense, thus contravening Felderhof's constitutional rights.
Felderhof is the only Bre-X official charged with breaking Ontario securities laws in the scandal.
The company collapsed three years ago in one of the biggest gold frauds ever, having climbed from obscurity to a stock-market value of as much as US$4 billion after claims of huge gold reserves in Indonesia. (*)