Canada Turns a Blind Eye to BCE

| About: BCE Inc. (BCE)

Why are the Canadian securities regulators and the financial editors turning a blind eye to the goings-on with the trading of BCE stock? Can’t they spot fraud when it’s sitting on the end of their noses?

I received the following mail on November 2, but was too busy to look into it.

Bill, You have likely read my comments regarding the BCE leveraged buy-out and why it is highly unlikely to close. I think you could do a lot for your readers if you made a call on this and recommended a shorting or options strategy that would benefit the player who would profit by the sale not happening. It is incredible that media and HB&B are silent on this. Could it be that every broker has a ton of sheeple in their client base holding BCE and their prop traders are already lined up against their clients and stand to make a ton of money when the share price collapses?

I was assured there was another Stelco fraud going down. The mere thought of how much effort I put into disclosing that nasty bit of financial engineering by the Bay Street Bandits was enough to refocus my efforts on building a successful company here in The Bahamas.

Then I saw an item in the Discourse last night, which was followed by more mail:

Bill, Too bad there wasn’t enough time to get a report out on BCE. When the TSX price moved sharply from the low 30’s to the high 30’s late last Friday afternoon and early Monday, I sensed that insiders were going to push this up and dump it this week before the KPMG fiasco went public. When I saw the 2M shares traded in AH trading and the WSJ article at 9:30 last night I knew what would happen this morning. I posted an alert on your blog @ 10:30 PM but was anyone listening? Regulators need to look at who did the 2M trade(s) last night and follow the money back to the insider. I guess $70M in trades last night is small potatoes to regulators (but not to the buyers of BCE over the last few days).

BCE.TO is now down over -33% on the day [Wednesday]. BCE happens to be by far the largest telephone and telecommunications company in Canada.

I noted the following news release hype leading into this collapse.

• CANADA STOCKS-TSX rises 4 percent on resources, banksat Reuters (Mon, Nov 24)

The news about Citigroup (NYSE:C), which is one of the banks financing BCE's (BCE.TO: Quote, Profile, Research, Stock Buzz) C$34.8 billion buyout, also helped lift BCE stock. [ID:nN24516514] BCE had languished as investors fretted the deal could be repriced, delayed or abandoned altogether because of problems in the financial markets. The stock climbed nearly 10 percent to C$37.83.

• Bell welcomes CRTC decision allowing wholesale Internet network management CNW Group (Thu, Nov 20)
• Canada watchdog sides with BCE on Web traffic shaping at Reuters (Thu, Nov 20)
• Bell announces new smartphone plans offering 25 percent more calling minutes than competitor plans CNW Group (Thu, Nov 20)
• VoIP Managed Service from Bell provides advanced toolkits, 24/7 expertise CNW Group (Mon, Nov 17)
• Reuters Summit-UPDATE - TD Bank committed to financing BCE at Reuters (Wed, Nov 12)
• Reuters Summit-UPDATE - TD Bank committed to financing BCE at Reuters (Wed, Nov 12)

The parties who traded the BCE stock Tuesday night can be discovered in 15 minutes. If there was an honest cop in the country, insiders (and that includes bankers and lawyers) would be going to prison.

Do we need to resort to vigilante justice?

Oh Canada! What a sad state of affairs.