Vancouver Stock Exchange

The Vancouver Stock Exchange (VSE) was a stock exchange based in Vancouver, British Columbia. It was incorporated 1906. On November 29, 1999, the VSE was merged into the Canadian Venture Exchange (CDNX).

History It was incorporated 1906 and was the third major stock exchange in Canada, after the Toronto Stock Exchange (TSX) and Montreal Stock Exchange (MSE), and featured many small-capitalization, mining, oil and gas-exploration stocks.

In 1989, Forbes magazine labelled the VSE the "scam capital of the world."Scam capital of the world Forbes May 29, 1989 The VSE tended to attract colourful characters involved in questionable schemes. The best known 'character' on VSE was Murray "the Pez" Pezim. The British journalist Bob Mackin wrote about Pezim: ""The Pez" was the quintessential Howe Street wheeler-dealer known for smoking cigars, promoting his latest get-rich-quick scheme and womanizing. He flogged Vita Pez pep pills and audio tape greeting cards through Pezzaz Productions, a subsidiary of Pezamerica. He scored big with the 1981 Hemlo Valley and 1989 Eskay Creek gold discoveries."

In 1973, the Royal Canadian Mounted Police estimated that between 20%-30% of the stocks of the companies listed in the VSE were involved in some sort of fraud. In 1979, a study revealed that investors in companies listed on the VSE lost some of their investments due to fraud 84% of the time, and all of their investments due to fraud 40% of the time, giving the VSE the dubious reputation as the stock exchange with the highest rate of fraud in the world. In 1991, it listed some 2,300 stocks. Some local figures stated that the majority of these stocks were either total failures or frauds. A 1994 report by James Matkin (Vancouver Stock Exchange & Securities Regulation Commission) made reference to "shams, swindles and market manipulations" within the VSE.High Risks Don't Deter U.S. Funds From Vancouver Deals, New York Times, August 8, 1994. Regardless, it had roughly C$4 billion in annual trading in 1991. The Hells Angels were extensively involved in many of the stock market frauds on the VSE in the 1980s-1990s. Sasha Angus, the anti-fraud officer of the B.C. Securities Commission in charge of regulating the Vancouver Stock Exchange complained that many wealthy businessmen are quite willing to do business with the Angels and that "We understand the biker gangs are behind a lot of stuff [fraud] we've seen. But they don't always leave their calling card".

The dubious reputation of the VSE made investors unwilling to put their money into stocks in the "scam capital of the world", and led to the VSE to go into a major decline by the 1990s as investors much preferred the better regulated Toronto Stock Exchange. The journalist Clyde Woolman wrote: "The often swashbuckling, sometimes outrageous style of the likes of Nelson Skalbania and Murray Pezim sucked up newspaper print and did nothing to alter the exchange's image". On November 29, 1999, the VSE and the Alberta Stock Exchange (ASE) merged to become the Canadian Venture Exchange (CDNX) (now known as the TSX Venture Exchange), at which time the CDNX acquired the minor-cap stocks from the Bourse de Montréal (MSE). The trading floor of the old VSE remained as the trading floor of the new CDNX.

Rounding errors on its Index price The history of the exchange's index provides an example of large errors arising from the accumulation of seemingly minor round-off errors. In January 1982 the index was initialized at 1000 and iteratively updated with each subsequent trade. After each update, the index was truncated to three decimal places. The truncated value was used to calculate the next value of the index. Updates occurred approximately 3000 times each day. The accumulated truncations led to an erroneous loss of around 25 points per month. Over the weekend of November 25–28, 1983, the error was corrected, raising the value of the index from its Friday closing figure of 524.811 to 1098.892.

Locations

849 West Pender Street, (1907–1910)"Stock exchange to open shortly," The Province, (27 July 1907), 1. Daily Province Building, 142 West Hastings Street, (1910–1915) Pacific Building, 744 West Hastings Street, (1915–1918) 326 Homer Street, (1918–1924)"Takes larger quarters," Vancouver Sun, (4 June 1918), 3. 532 Granville Street, (1924–1929)"Vancouver Stock Exchange moving," The Province, (12 May 1924), 25. Exchange Building, 475 Howe Street, (1929–1946)"Fifth move brings exchange to fine quarters," The Province, (22 July 1929), 19. Branson Brown Building, 540 Howe Street, (1946–1964)"Stock Exchange moves to own building soon," Vancouver Sun, (16 November 1946), 10. Canada Trust Building, 536 Howe Street (1964–1981)"Bennett opens Stock Exchange," Vancouver Sun, (10 December 1964), 38. Stock Exchange Tower, 609 Granville Street, (1981–1999)"VSE ends 17 years on Howe Street," The Province, (25 October 1981), 23.

Leadership

President (to 1959) and Chairman (from 1960) From its inception, the VSE elected annually a Managing Committee led by a President. At the 1960 annual meeting, the exchange's bylaws and constitution were revised, and the governing body was changed to a Board of Governors led by a Chairman. Initially, the annual meeting was held in July. In 1926 it was held in May, and from 1927 onwards in January. In 1976 it moved to June.

1907 – Charles D. Rand 1908 – James Rawlinson Waghorn 1909, 1910 – Henry James Thorne 1911 – John S. Rankin 1912 – Gwyn Ivor Gwynn 1913 – Robert Baldwin Ellis 1914 – John D. Mather 1915 – Alfred Newton Wolverton 1916 – Albert Ernest Austin 1917 – Donald Marshall McGregor 1918 – Henry James Thorne 1919 – Gwynne Ivor Gwynn 1920 – Charles Mason Oliver 1921 – Charles Graham Pennock 1922 – James T. MacGregor 1923 – Alfred Newton Wolverton 1924 – Robert Gelletly 1925 – William Henry Francis Nanson 1926 – Theodore Powell Crowther 1927, 1928, 1929 – Sidney Wilfred Miller 1930, 1931, 1932 – Charles Graham Pennock 1933, 1934, 1935 – Arthur Ewart Jukes 1936 – William Hedley Marshall Smith 1937 – Frank Elmer Hall 1938 – John McGraw 1939, 1940, 1941 – Arthur Ewart Jukes 1942, 1943, 1944 – Alfred Newton Wolverton 1945, 1946 – Kenneth Lawrence Patton 1947 – Sir Stephen Lennard 1948 – Maitland Dewar McCarthy 1949, 1950 – Philip Alfred Wootten 1951, 1952 – John Howard Montgomery Lamprey 1953 – Frank Elmer Hall 1954, 1955 – John McGraw 1956 – Norman James Alexander 1957 – William Edward Thomson 1958 – Hubert Richard Whittall 1959 – Thomas Elliott Pilkington At the 1960 annual meeting, title changes to Chairman of the Board of Governors 1960 – Harold William Lefever 1961, 1962, 1963 – William Spence 1964, 1965 – Bruce Clinton Samis 1966 – Alan George Thompson 1967 – Donald Coddington McDermid 1968, 1969, 1970 – George Maurice Tapp 1971 – Gerald Hugh Stevenson 1972 – George Renwick Wright 1973 – Michael McGuire Ryan 1974 – Ernest Charles Drake 1975 – George Duval Sherwood 1976 – Ronald James Webster 1977 – Richard Martin Thompson 1978 – Brian Desmond Graves 1979 – Ian Archibald Falconer 1980 – Robert George Atkinson 1981 – Robert Page Chilcott 1982 – Peter MacLachlan Brown 1983, 1984 – John Anthony Hepburn 1985, 1986 – Gerald Fabro 1987, 1988 – John Legget Mathers 1989, 1990 – Martin James Reynolds 1991, 1992 – Brian Dennis Harwood 1993, 1994, 1995 – Stuart Ross Sherwood 1996, 1997, 1998 – Doris Bradstreet Daughney 1999 – Roslyn Kunin

Secretary-manager (to 1965) and president (from 1965) The president and chief executive officer was a full-time, paid position that evolved out of the office of secretary. In 1923, the office of secretary was separated from the managing committee, and the secretary became the general manager of the exchange. In 1960, the year the president of the managing committee was changed to the chairman of the board of governors, secretary Van Luven's title was changed to executive vice-president. In February 1965, his title was changed to president and chief executive.

Guy Sutton Rothwell, 1923 – October 1926 Leonard Hughes-Jones, October 1926 – 1927? Hugh Graham Davidson, May 1927 – March 1928 Albert Ernest Sprange, March 1928 – December 1941 Victor Alexander Simons, December 1941 – June 1956 John Alvin Van Luven, June 1956 – 4 October 1971 Thomas Anthony Dohm, 1 February 1972 – 8 November 1972 Cyril White, 1 February 1973 – 30 August 1976 Robert Alexander Scott, 31 August 1976 – 31 December 1981 Donald James Hudson, January 1982 – 30 September 1995 Michael Edward Johnson, October 1995 – 29 November 1999

Vancouver Stock Exchange

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