With its tale of fool's gold and mysterious death, the Bre-X story is on its way to becoming a Hollywood remake of The Treasure of the Sierra Madre. The book contracts have been signed, the movie rights sold. But the story is only beginning for the hundreds of investors suing to recover their lost fortunes. Investors claim they were duped by the Canadian company and, in one case, the brokerage and analyst that promoted its stock to stratospheric levels.
Bre-X Minerals was a tiny minerals exploration company whose market capitalization had soared to $5 billion before collapsing into bankruptcy last month when its promise of the largest-ever gold discovery, in the jungles of Indonesia, was exposed as a fraud. Bre-X geologists had created the illusion by taking gold from other mines and placing them in ore samples from their Busang gold mine.
Shares in Bre-X, whose initial public offering was...
