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Leitzinger & Bre-X - did he get in bed with SCO too soon?In a curious divergence from Dr. Leitzinger's appearance on behalf of SCO in this case, a very lazy peek through Google results for 'leitzinger + deposition' (lazy as in: first result) suggests that he signed up for involvement WRT to SCO just a bit too soon. Many on the board have pointed out the similarities between the "stock scam" aspects of SCOX & Bre-X. Leitzinger testified on the side of the shareholders in their lawsuit against Bre-X; he has probably blown his opportunity to do so on behalf of SCOX shareholders by substantially drawing from SCO's teat already. For those with a gum-wrapper (not-quite-tinfoil) bent, maybe Boies hired him to protect Darl & friends from his testifying against them in their inevitable shareholder suit. Bre-X shareholders sued based on the "fraud-on-the-market doctrine": "In this case, Bre-X and Bresea investors were defrauded by defendants’ continuous stream of increasingly positive statements concerning the extent and nature of Bre-X’s alleged gold resources at its Busang mine. Defendants’ false statements continued unabated throughout the Class Period, beginning with Bre-X’s initial positive statements concerning Busang in January 1994 (Compl. ¶ 104) and culminating in early 1997 with statements that Bre-X’s Busang properties held as much as 200 million ounces of gold. Compl. ¶ 3. Defendants’ statements concerning Bre-X, Bresea, and Busang were never withdrawn, corrected, or otherwise qualified during the Class Period." http://securities.stanford.edu/1012/BXMNF97/2002628_r01b_97159.pdf Anybody want to draw parallels between the described behaviors and the words of Darl McBride (among many)? I sure do. Leitzinger was called upon to demonstrate that the Canadian exchanges that Bre-X was traded on were "efficient markets", and that they were materially influenced by Bre-X management's false statements. He demonstrated this by weighing in on shares outstanding, trading volume, weekly turnover rate, market capitalization, public information, relationship between material information & market price, correlation of stock prices on different markets, and last-but-not-least his own homegrown application of "random walk" theory. Bre-X moved to strike his opinions & testimony in their entirety, with the court finding that his random walk analysis was not an appropriate methodology but that the rest of his testimony would stand. http://securities.stanford.edu/1012/BXMNF97/2002930_r01o_97159.pdf On reflection, it becomes perhaps more clear why Dr. J. L. did not wait for the shareholder suits - SCO's trading pattern shows significant disconnects from an efficient market WRT trading volume & relationship btwn material information and market price. Which reinforces our belief that SCO trades on 'manipulation' rather than 'information'. |
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