Canadian microcap stock manipulation often escapes detection

Guest columnist Paul Garside, CFE, says that Canadian businesses can be surprised by stock-price manipulation schemes. Here he details the basics of this fraud and provides some ways to detect it. As the former officer in charge of the Royal Canadian Mounted Police (RCMP) Integrated Market Enforcement Team (IMET) in Montreal, he investigated market crimes, including Project Carrefour — a substantial microcap stock manipulation case. — Tim Harvey, "Global Fraud Focus" editor

In 1993, the owner of a Canadian penny-stock mining company, Bre-X Minerals Ltd, a Calgary-based mining company, purchased the rights to some land in the middle of the jungles of Borneo. He bought the land on the advice of a geologist and explorer, John Felderhof, who estimated that it contained gold deposits.