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Downtown: Defunct VSE had colourful history

Controversy-ridden exchange couldn't shake stigma of being a penny stock casino

Hornby Street has a bike lane, for all types of peddlers.

Howe Street was once known around North America as the West Coast's high-risk, hold-onto-your-wallet zone where people pedalled dreams of riches on the Vancouver Stock Exchange.

In 1989, Forbes magazine famously christened the VSE the scam capital of the world. Ironic, because when it opened Aug. 1, 1907 at 849 West Pender St., it was supposed to be a made-in-B.C. solution to frontier fraud. More than a dozen fly-by-night regional exchanges popped up since the Gold Rush days. VSE president C.D. Rand even proclaimed: "Many applications to list stocks of doubtful merit have already been made to the Exchange, but have been promptly turned down by your executive, and this policy will be adhered to while we remain in office."

By the end of 1908, there were 14 companies trading. The VSE moved around the corner to 475 Howe St., just in time for the 1929 Wall Street crash and the Great Depression. Despite Rand, stocks of doubtful merit found their way onto the trading floor.

By 1969, the VSE broke the $1 billion trading barrier. The RCMP estimated in 1973 that 20 to 30 per cent of stock, mostly mines and junior industrials, were manipulated. A Brown Farris and Jefferson report in 1978 found the odds of losing were five times out of six.

The VSE became synonymous with ex-Torontonian Murray Pezim, a larger-than-life son of a Romanian immigrant butcher. "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.

The VSE moved from Howe Street for good in 1981 to 609 Granville and the new Stock Exchange Tower. As luck would have it, 1981 was the biggest recession since 1929 and a fire on the trading floor forced evacuation.

Saudi Arabian arms dealer Adnan Khashoggi became a VSE player in the mid-1980s. The one-time richest man in the worlds Skyhigh Resources lived up to its name, zooming from 60 cents a share to $72.

The VSE listed 2,300 stocks by 1990 more than two-thirds in the gold, silver, oil and gas businesses and became fully automated. Yet it couldnt shake the stigma of being a penny stock casino.

The VSE handled $6.7 billion of trades in 1993. The NDP government of the day hired lawyer Jim Matkin, whose investigation said significant restructuring was needed to improve public confidence because of the continuing occurrence of scams, swindles and market manipulations.

Howe Streeters loved flaunting their money and several made investments in sports franchises: Herb Capozzi and Peter Brown were partners in the North American Soccer League's Vancouver Whitecaps; Nelson Skalbania moved the Atlanta Flames to Calgary; and Edgar Kaiser Jr. owned the Denver Broncos. Pezim became the B.C. Lions first private owner, but the team went bankrupt and quarterback Doug Flutie moved east to help the Toronto Argonauts and Calgary Stampeders win Grey Cups.

The Howe Street denizen lived at the south foot of Hornby Street and died at 77 in November 1998, the year before the VSE and Alberta Stock Exchange Merged to become the Canadian Venture Exchange. The CDNX was eventually absorbed by the Toronto Stock Exchange.

The Stock Exchange Tower, renovated in 2004, is now the Canaccord Tower, headquarters of the investment house founded by Pezim pal Peter Brown.

The Old Stock Exchange Building is due for a remake worth $200 million from Credit Suisse, which hired renowned architect Harry Gugger to expand it to 30-storeys.