Fraud and financial markets: the 1997 collapse of the junior mining stocks
AbstractThe Vancouver Composite Index fell by over 25% in less than six weeks during spring 1997 as the junior mining sector collapsed. We argue that this market collapse was triggered by the failure of Bre-X Minerals when that companyâs Indonesian claims, previously believed to contain the worldâs largest gold deposit, were shown to be pure fraud. Our event study, based on market returns for the Vancouver Composite Index and for a portfolio of 59 gold stocks, shows the effects of the Bre-X scandal to be both sizeable and significant. There is also some evidence that smaller exploration companies were hardest hit.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economics and Business.
Volume (Year): 52 (2000)
Issue (Month): 3 ()
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Web page: http://www.elsevier.com/locate/jeconbus
Other versions of this item:
- William O. Brown, Jr. & Richard C.K. Burdekin, . "Fraud and Financial Markets: The 1997 Collapse of the Junior Mining Stocks," Claremont Colleges Working Papers 1999-28, Claremont Colleges.
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
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