What is the Vancouver Stock Exchange (VSE)?

What is the Vancouver Stock Exchange (VSE)?

The Vancouver Stock Exchange (VAN/VSE) is a now-defunct stock exchange formerly located in Vancouver, British Columbia, Canada. It was incorporated in 1907 as the third-largest marketplace in Canada behind the Toronto Stock Exchange (TSX) and Montreal Stock Exchange. Stocks listed on this exchange were denoted by a .V following the ticker symbol.

The Vancouver Stock Exchange (VAN) is a now-defunct Canadian stock exchange, founded in 1903 and located in Vancouver.

The exchange specialized in smaller and riskier listings, primarily among mining and oil exploration companies based in Canada, some of which proved to be fraudulent.

Scandals at the Vancouver Stock Exchange

Given the abundance of such speculative business, the VSE came to be known for equity market fraud. Many investors were misled into investing in highly risky ventures, and the promoters would end up misusing the money. To make matters worse, the requirements to list a company on the VSE were not as strict as other exchanges in North America, hence attracting dubious business.

The William Bennett Scandal

One such high-profile case was that of insider trading by the former premier of British Columbia, William Richards Bennett (Bill Bennett). He, along with his brother, sold shares of a company just before its acquisition was called off. Hence, they avoided losses from the subsequent fall in share prices.

The case lasted for a period of about 11 years. In the end, Bennett, along with two others, was convicted by the British Columbia Securities Commission (BCSC) and ordered to pay a fine of $1 million in addition to the sanctions imposed on them.

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Columbia Homogenous Parallel Processor (CHoPP)

In 1986, CHoPP Computer Corp. claimed to had built a supercomputer that was 100 times faster than that of the erstwhile market leader, Cray Computers. CHoPP’s stock surged from 17 cents per share to $125 per share, following the company’s pronouncement. However, as it turned out, there was no real product, and consequently, the stock collapsed.

Axagon Resources Ltd

Axagon Resources sold selling another non-existent, but more believable product – non-corrosive and non-toxic salt to melt snow. The company’s stock price rose more than tenfold. Regulators ultimately shut down Axagon when the company’s claim of more than $8 million in sales turned out to be less than $8,000.

There were many other examples involving different types of fraud, such as money laundering, tax evasion, market manipulation, etc. Scams such as the above were one of the main reasons that prompted the VSE to merge with other exchanges.