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The national registration search contains the names of all individuals and firms who are registered to sell securities in Canada, with the exception of those registered solely with the Ontario Securities Commision (OSC).

ASC ExternalSite > Investors > Investor Resources > You ASC'd Blog > Posts > Lights, camera, fraud! Shining a spotlight on famous investment scams

September 14
Lights, camera, fraud! Shining a spotlight on famous investment scams


The 18th annual Calgary International Film Festival (CIFF) opens next week, and is the largest film festival in Alberta. CIFF showcases approximately 200 short films over 12 days hosted at locations throughout the city. In the spirit of CIFF, we’re shining the spotlight on some of the most famous investment frauds in history.

You may recognize the names – Ponzi and Bre-X - but are you familiar with the frauds that led to their fame?

Charles Ponzi, The Securities Exchange Company


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If this character’s name sounds familiar, it’s because he operated one of the most notorious Ponzi schemes ever - in 1919. While he did not actually invent the concept of the Ponzi scheme, his scam was so large and successful that it drew national attention to that type of fraud, for the very first time.

Ponzis’ scheme, which was initially legitimate, involved international reply coupons. These were vouchers individuals could purchase to include with their overseas mail to cover the cost of the return postage required by the recipient to reply back. Ponzi would purchase these coupons in other countries where postage was cheaper and then sell them in the United States at a profit.

His “business” turned into an investment fraud when he expanded the scheme and began to recruit people to invest, claiming their investments would fund the purchase of more international reply coupons. Now operating under the name Securities Exchange Company, he would lure investors in with promised returns of 50 to 90 per cent in only 90 days. Inevitably attracted to such a lucrative offer, investors flocked, providing Ponzi with enough new business that he could pay existing investors with the new funds, while also pocketing millions of dollars for himself.

Ponzi’s scheme was discovered and exposed in 1920 when speculations about him and his business made front-page news in the Boston Post and he was subsequently investigated. Ponzi was charged with 86 counts of mail fraud; he pled guilty and spent 14 years in prison. In total, he defrauded investors of roughly $20 million.


John Felderhof, Bre-X Minerals Ltd.


Image Source:,16641,19970519,00.html


The recent film Gold (2017) starring Matthew McConaughey dramatized true events from the Bre-X Minerals Ltd. scam that took place in 1997.

Bre-X was a junior exploration company based in Calgary, Alberta. Originally a penny stock when it was first listed on the Alberta Stock Exchange in 1989, the company was eventually valued at $6 billion at its peak in 1996. Unfortunately, this valuation was based on a series of falsified samples that made it appear as if the Bre-X site in Busang, Indonesia held one of the biggest deposits of gold ever reported.

When David Walsh, the founder of Bre-X, wanted to revive the company in 1993 he contacted his colleague and well-known geologist John Felderhof. Felderhof recommended mining in Busang, an isolated piece of rainforest on the Island of Borneo, Indonesia. Convinced the site was a rich, untapped gold mine, he assembled a team of geologists to explore the property. One of them, Michael de Guzman, engaged in salting the initial core samples using gold from his wedding band. He continued to shave gold from different sources into the samples for over two years, while Walsh wildly promoted the Bre-X stock.

The fraud unravelled quickly when an independent consultant tested the samples and found the gold estimates were exaggerated. Around the same time in 1997, de Guzman fell to his death from a helicopter flying over the Indonesian jungle. The stock plunged, investors lost hundreds of millions of dollars and Felderhof (the only perpetrator still alive) was charged with eight counts of violating the Ontario Securities Act, including allegations of insider trading and misleading investors. After a lengthy trial, he was acquitted of all charges. Even after his death in 1998, there continues to be great uncertainty surrounding Walsh’s involvement and potential knowledge of the scam. To this day, no one has been convicted, fined or claimed responsibility for the fraud.

Helpful links

Bre-X: The real story and scandal that inspired the movie Gold

How Stuff Works – Charles Ponzi

You ASC’d – Ponzi Schemes