(Bre-X), a small mining company, announced in the early 1990s that it had discovered a fairly significant gold deposit in Indonesia. The company's shares skyrocketed from pennies a share to over $280 per share.
Subsequently, it was discovered that the company had been "salting the samples" 41 and that there was little, if any, gold there. This information was not disclosed to the market until long after it was discovered that there was no gold.
Certain parties who had access to this information benefited; however, many investors lost a significant amount of money.
Many investors lost millions of dollars, including the Ontario Municipal Employees Retirement System and the Ontario Teachers’ Pension Plan. Investors sued the company and its management for providing misleading information.
Instructions
Using the conceptual framework, identify and analyze the financial reporting issues.