"Subsequent events would show that Chelekis indeed wrote what he wanted. What he wanted to write most of all were nice things about companies that paid him money."

"Chelekis, then 45, was born in Ithaca, N.Y. and moved to Florida in the late 1980s. A Scientologist, he settled in Clearwater, the spiritual headquarters for the Church of Scientology. In 1989 his company, Rex Publishing, produced The Action Guide to Government Auctions... The next year, the U.S. Marshals Service filed a formal complaint against Chelekis, alleging that his advertising was misleading. More than a dozen consumers also complained that the book was outdated and virtually worthless and that Chelekis was not making good on his money-back guarantee."

"The letter was scary on two counts. First, it was false. My eight-year rleationship with du Plessis was strictly business. Second, Chelekis had dropped all pretence of a business dispute. It was now all-out war."

"The letter was scary on two counts. First, it was false. My eight-year rleationship with du Plessis was strictly business. Second, Chelekis had dropped all pretence of a business dispute. It was now all-out war."

" 'George Chelekis was a journalist for hire,' Gibson said in his opening remarks to Judge Rowan on September 8, 1997. 'Someone with a grudge against David Baines and Adrian du Plessis hired Chelekis to undertake a smear campaign. They financed his trip to Vancouver, the cost of his private investigators and paid him a handsome sum for his efforts. There is simply no other logical explanation for his conduct.' (If there was a mystery financier, we never found out who it was.)"

by David Baines
B.C. Business Magazine, Feb. 1997

Vancouver Sun stock market reporter David Baines was impaled by the pen of penny stock tipster George Chelekis. He recounts how he turned it around and stuck Chelekis for the largest libel award in B.C. history.

In the early morning hours of April 15, my wife and I returned to our New York hotel room just off Times Square, slightly boozy from imbibing the bar music in Greenwich Village. The red light on the telephone was pulsing with an influx of calls from family members, neighbors and reporters with some long-awaited news. B.C. Supreme Court Judge John Rowan had assessed $875,000 in damages, plus legal costs, against three parties who had orchestrated or facilitated a campaign to destroy my reputation as a journalist. It was the culmination of a four-year battle to redress one of the most egregious libels ever committed in Canada.

Rowan's award was the second-highest in Canadian libel history, exceeded only by the $1.6 million awarded an Ontario Crown prosecutor libeled by the Church of Scientology. In British Columnia, it was more than six times the previous record of $125,000 awarded to deputy attorney general Richard Vogel against CBC reporter Chris Bird.

In his judgement, Rowan rejected allegations I had used my position as a stock market reporter and columnist with The Vancouver Sun to manufacture negative stories against Vancouver Stock Exchange companies and profit on the ensuing sell-off. He also dismissed allegations I was involved in a homosexual relationship with my alleged co-conspirator, free-lance stock market investigator Adrian du Plessis, and that I had contracted AIDS but had failed to tell my wife.

(The relevance of these alleged sins to my purported stock market transgressions was never explained.)

In 1986, when I was still a rookie business reporter with The Province newspaper, I was assigned to interview Foster Winans, a former Wall Street Journal writer who had authored the Journal's venerable "Heard on the Street" column. Winans had been caught taking bribes from a broker who paid Winans to forewarn him about details in the upcoming columns, thus enabling the broker to buy or sell stock, depending on whether the news was good or bad. Winans had been promptly dismissed from his job and was facing criminal charges.

About the same time, a former colleague working freelance with The Financial Post was found by her employer to have been investing in the same public company she had been writing about and was summarily barred from ever writing for The Post again. In my view, she is a very honorable person and the investment was immaterial to her net worth, but the incident became the seminal embarrassment in her life.

Both these incidents made a deep impression, but at that time the issue was largely academic, as I was a green reporter with no track record and absolutely no influence over any company's stock price. But this gradually changed after I met du Plessis, a former floor trader who knew the dark secrets of the VSE. With his help I learned how to delive into VSE companies and their promoters and expose their seamy methods.

As my reputation grew, so did public recognition. I won a National Newspaper Award, a National Magazine Award, a Jack Webster Award and numerous B.C. Newspaper Awards. Service clubs, professional organizations and journalism schools often asked me to address their members. Local and national radio and television shows interviewed me. Journalists from Forbes, Barron's, CNN, ABC-TV and many other large media outlets routinely called to pick my brain about the Vancouver Stock Exchange, a.k.a. the Venus flytrap of North American stock markets.

In late July, 1994, I received a call from a George Chelekis, a writer for The Bull & Bear financial newspaper, a U.S. publication I mistakenly viewed as a Barron's-type periodical. Chelekis said he was doing a story on the VSE and began asking me questions that gradually moved from the Exchange to me personally. I became increasingly uncomfortable and soon cut him off. A day or two later, du Plessis - whose nose for subterfuge was in high alert - called to warn there was a fellow from Florida who was purportedly writing about the Exchange, but whose real motives were unknown.

On July 29 I called Chelekis's office and advised his secretary I did not want to be mentioned in his story. In a follow-up fax, I stated: "I have received information that you are not a mainstream journalist, as you represented yourself. I therefore direct you not to use my name or any quotes from me in your publication."

Chelekis immediately wrote The Sun publisher Don Babick, advising him I had threatened to kill his secretary and was now trying to kill his story. He also wrote senior editors at The Financial Post, The Globe and Mail and The Toronto Star declaring: "Apparently a nerve was touched when my investigation turned up vested interests connected with Baines and du Plessis - neither want this information published as it may severely impact their careers."

Chelekis portrayed himself as a respectable journalist. His letterhead proclaimed him a member of the American Society of Journalists and Authors. He also said he was a "best-selling author" and winner of something called a Gold Charlie Award.

However, one look at a copy of The Bull & Bear confirmed my worst suspicions: It was a Florida-based rag that touted penny stocks and blatantly invited public companies to "Tell your story to millions of investors" by having "an award-winning author write your company's story the way you want it to be told." When I later asked Chelekis whether he was the award-winning author, he replied, "No one pays me to write articles the way they want them written. I write what I want."

It was specious phraseology. Subsequent events would show that Chelekis indeed wrote what he wanted. What he wanted to write most of all were nice things about companies that paid him money.

In August 1994, John Woods, editor of Canada Stockwatch in Vancouver, faxed me the latest edition of The Bull & Bear. Written by Chelekis, the line story described a "Baines-du Plessis money-making scheme" in which we "connived to create a pipeline of disinformation.

"Forget what you've heard about the Vancouver Stock Exchange. Not only are a great deal of the rumors outdated, but my recent investigation has uncovered that much of the bad "news" was mostly generated to further the careers of David Baines and Adrian du Plessis ... Du Plessis' game has been to hype accusations against VSE-listed companies, maneuvering Baines for press coverage. Du Plessis then got paid a fee, based upon what he recovers for those investors."

This shoot-the-messenger tactic was nothing new. In October 1992 a detective from the Co-ordinated Law Enforcement Unit advised me that, according to an informant, somebody had placed a contract on my life. That threat had passed without incident, as surely would Chelekis. Or so I thought.

On October 4, 1994, a press release came over Canadian Corporate News in Canada and PR wire in the United States. Issued by Chelekis's secretary, the release hyped a second Bull & Bear story implicating du Plessis and me in a "six-year short-selling scheme."

The release said Chelekis had "uncovered that Baines used a death-threat hoax in a failed attempt to advance his career, that du Plessis may be illegally concealing his short-selling profits in a Panamanian bank account." It also quoted Chelekis: "These two built careers as whistleblowers against a scandal-ridden VSE when, in fact, they were the ones engineering the scandals. While the VSE became the most heavily regulated North American stock exchange, these two were never disciplined for their personal abuse and profiteering."

I quickly obtained a copy of the story and was horrified by what I saw. Entitled "The Vancouver Stock Exchange: A Short Seller's Paradise Revealed", it started with a verse from Robert Service's The Shooting of Dan McGrew. "There are strange things done in the midnight sun, by the men who toil for gold...".

"Most U.S. investors could care less about the gossip and financial intrigue buzzing around Howe Street," the story began. "What may interest investors is how two individuals manufactured negative press about selected companies in order to drive down their share prices. Their previously undetected enterprise, dated back to 1988, has caused U.S. and other investors to lose tens, if not hundreds, of millions of dollars.

"In Vancouver, the big question mark has been: Why are these two self-righteous individuals so energetic in their efforts to generate bad press? It is for only one reason: short-selling."

Alleging I had "casually altered facts or manufactured outright lies to drag down the share values," Chelekis said, "it is now a matter for the Royal Canadian Mounted Police and the Canadian Securities Commission to determine the extent of their crimes and the dollar amounts they were paid for their scourge against the VSE."

Chelekis was not prepared to wait for due process: "Throw the bums in jail," he wrote.

The allegations were nonsense. I did not write for any purpose other than to convey the true and plain facts of Howe Street. I had not invested, short or long, in any VSE stocks. In fact, I hadn't bought any stocks other than a brief gambit with Toronto Stock Exchange-listed Placer Dome, which had been duly disclosed to my employer, and shares of The Vancouver Sun owner Southam Inc. bought under our employee stock purchase plan.

After reviewing the press release and the story, I sent a one-word message to my lawyer: "Help."

"If they make a movie of this, I want Sylvester Stallone to play me," joked Barry Gibson, a partner at Farris Vaughan Wills & Murphy. Gibson, a bespectacled 49-year-old of slight build and mild manner, hardly evokes Hollywood beefcake, but he has quietly emerged as Western Canada's pre-eminent libel lawyer.

Gibson's forté was acting for the defense in libel suits. His stable of media clients included The Vancouver Sun, Hollinger, Inc., Sterling Newspapers, Lower Mainland Publications, Vancouver magazine and the now-defunct Equity magazine. But due to a twist of fate, he was about to act for a media outlet that would become a plaintiff, rather than defendant, in a libel case.

Givson immediately drove to The Sun newsroom and conferred with then-editor-in-chief Ian Haysom, managing editor Scott Honeyman and business editor Gerald Prosalendis. They agreed the allegations were extremely serious, bordering on the criminal, and for The Sun to do nothing would be viewed as evidence that Chelekis's allegations were true, and that the newspaper condoned my illicit actvities.

The Sun immediately issued a rebuttal through Canadian Corporate News and filed a lawsuit against Chelekis, The Bull & Bear, it's publisher David Robinson and Canadian Corporate News alleging they knew the allegations were "false and defamatory, or were willfully blind to the truth or falsity of the contents thereof."

Gibson would not have an opportunity to flex his muscles before a movie camera, but he would before a B.C. Supreme Court judge.

Although the first Bull & Bear story had gone virtually unnoticed, the press release hyping the second story did not. Reporters from The Globe and Mail, The Financial Times, The Seattle Post-Intelligencer, Reuters, and CCN-TV called to warn me of it. New York Times business writer Diana Hendriques even provided some background information on Chelekis.

Chelekis, then 45, was born in Ithaca, N.Y. and moved to Florida in the late 1980s. A Scientologist, he settled in Clearwater, the spiritual headquarters for the Church of Scientology. In 1989 his company, Rex Publishing, produced The Action Guide to Government Auctions - a list of addresses and telephone numbers of government agencies that sell seized property. "How would you like a new house or car courtesy of the United States government? A $150,000 home sold for $15!" enthused one of his ads.

The next year, the U.S. Marshals Service filed a formal complaint against Chelekis, alleging that his advertising was misleading. More than a dozen consumers also complained that the book was outdated and virtually worthless and that Chelekis was not making good on his money-back guarantee.

Chelekis had meanwhile started a new venture: the International Real Estate Clearing House, which claimed to know "tens of thousands of eager buyers" in foreign countries who were anxious to purchase single-family homes.

In July 1991 the St. Petersburg Times reported that more than six companies had sued Chelekis for more than $500,000. One plaintiff was a credit-card processing company that claimed $341,600 worth of credit-card chargebacks arising from defective merchandise or purchases that consumers had not made.

However, Chelekis had abandoned his businesses and was nowhere to be found. "I think he personally got more satisfaction from creative writing than being in business," said a former associate, speculating on why Chelekis had flown the coop.

In 1993 Chelekis reappeared in the news, this time in a much more favorable light. He was presented with a Charlie Award by the Florida Magazine Association for his column "Dollars and Sense".

He would use this award to pole-vault his way from Clearwater to Vancouver.

Although the mainstream press recognized Chelekis's allegations for what they were, others - who wanted to believe - did not. They mass-faxed the offending material to almost every broker and promoter in town. Almost overnight, the floodgates spilled forther a torrent of lies and vitriol. In one widely-faxed letter entitled "David Baines, The Truth", an anonymous person purporting to be a vice-president of a Vancouver brokerage firm described how "Baines works with a consortium of professional 'short' traders headed by Peter Brown [chair of Canaccord Capital Corp., the largest dealer of VSE stocks]. Most of this trading is conducted offshore, and in Baines's case, he owns 100 per cent of it." (In one of the few pleasant telephone conversations I've had with Brown, who I often criticized in my columns, we laughed at the notion that, in view of our extreme differences, we could ever conspire on anything.)

Another fax - "David Baines - Professional Scumbag" - urged the RCMP and the B.C. Securities Commission to investigate me for market manipulation, calling me "a disgrace to professional journalism". Some were not nearly as subtle: "Baines, you f---ing bag of shit! You are worse than any promoter who ever walked Howe Street. Southam will soon realize this soon, so start looking for another job."

Some letters came from more reputable quarters and, therefore, were potentially more damaging. On February 13, 1995, Laurel de Ymurralde, self-described stock analyst from New Brunswick, wrote The Globe and Mail, The Financial Times and The Financial Post, advising that I had been "recently exposed" by Chelekis. "There appears to be more behind [Baines's] articles than bias or irresponsible reporting," she complained.

Some Vancouver junior companies and their supporters waded in. Most notably Naxos Resources, which claimed to have a "proprietary" method to unlock gold and platinum from the desert sands of southwestern United States, and U.S. newsletter writer J. Taylor, author of Gold & Gold Stocks Review, who embraced Naxos as teh next Bre-X Minerals. Together, they accused me of being in "an unholy alliance" with a major Vancouver-based investment bank to spread false reports, short the stock and then reap the benefits.

Meanwhile, Chelekis was busily fueling the flames. On October 28, 1994, he wrote me claiming that a CIA source had information I had been involved on a "on again/off again homosexual relationship" with du Plessis, that we "cruise the gay bars in Vancouver," and that my wife "is unaware that you may be HIV-positive." He concluded by asking, ostensibly in the interests of journalistic fairness, "Would you please respond to the above report?"

The letter was scary on two counts. First, it was false. My eight-year rleationship with du Plessis was strictly business. Second, Chelekis had dropped all pretence of a business dispute. It was now all-out war.

On November 1, 1994 he again wrote, stating that he was scheduled to appear "on anther major U.S. talk show to discuss the David Baines-Adrian du Plessis matter. I expect ot mention the CIA report." He also claimed to be gathering more news about my past and would launch an Internet newsletter called "The Baines-du Plessis Update". He further stated that he was negotiating a book deal that offered "a high five-figure royalty advance, but I would like to get at least $125,000 US."

On December 19, 1994, Chelekis wrote The Sun business editor Gerald Prosalendis: "Each time your Mr. Baines writes a column on a company or individual, the target of his wrath will receive a free copy of two articles written by The Bull & Bear newspaper. This program will continue until Mr. Baines is left with Zero for credibility."

Although our lawsuit had been filed months earlier, it wasn't until May 6, 1995, just before Chelekis appeared as a featured speaker at the Vancouver International Mining Investment Conference at the Hotel Vancouver, that our process-server caught up to him. Rattled, he took the podium and announced he had just been served by The Vancouver Sun. He also told the 150 mining players and investors in attendance that I had hung up on him hundreds of times: "How else but by asking can I possibly find out if it is true that Mr. Baines is HIV-positive and that his wife does not know?"

Stockwatch editor John Woods later testified that the audience sat in stunned silence. "You'd have thought you'd get a grunt of approval about something negative being said about The Sun or David Baines, but there was just silence."

There is somebody following you." Issued during a quiet telephone conversation, the warning came from an RCMP sergeant in commercial crime. Within days, a neighbor noticed a suspicious parked car on our street. When approached, the lone occupant drove off. His purpose wouldn't become apparent until the discovery process produced a partial report from an unidentified private investigator.

The PI's inquiry included "a spot check at the Baines' Richmond residence" where he had "discreetly" taken photographs. His search of the motor vehicle registry, the land title registry, the personal property registry and the courts disclosed that I owned a 1980 Rabbit, a 1985 Plymouth van, and a house assessed at $187,100 with an $88,000 mortgage registered against it. He also reported that The Sun and I had been named defendants in several civil lawsuits, none of which had amounted to anything.

Hardly the profile of a big-time swindler living off the proceeds of crime.

When Canadian Corporate News was served with our lawsuit, it immediately issued a statement saying it had no knowledge of any impropriety on my part and expressed regret at any damage caused by its transmission. CCN was clearly a neutral disseminator that had inadvertantly put a libelous release on its system. It had responded in a very proper, prompt and public manner, so we dropped it as a defendant.

However, there was growing evidence that another wire service - Market News Publishing, a Vancouver-based news disseminator that specialized in VSE-related news - had not only carried the press release, but also the two Bull & Bear stories. Market News was owned by Robert Shore, whom I had met briefly, but cordially, only once several years earlier. His system fed into the Star Data system with its thousands of terminals throughout Canada. Star Data, in turn, fed into Bloomberg Financial Services, a New York-based dissemination service with tens of thousands of subscribers worldwide.

The full-text publication of these feature stories was quite outside Market News's normal business. Shore usually confined his business to news releases. Also unusual were the two disclaimers at the bottom of the articles: "Opinions expressed here are solely those of the author and do not necessarily reflect the opinions of the publisher or the distributor"; and, "Distribution of this material has been paid for by the author who takes full responsibility for its contents." These disclaimers clearly showed that Shore realized he was publishing potentially hot material.

Given my limited contact with Shore, I was puzzled by his conduct. In early 1995, I called to discuss the matter and was astounded by his hostile response. Instead of expressing regret, he asserted his right to publish whatever he wanted. I hung up and immediated recommended to Gibson that he be sued. Within days, Shore and his firm were added as defendants.

Like Chelekis, Shore proved unrepentant. Questioned by Gibson in examination for discovery, he said he believes the material was true and didn't think an apology was warranted but would have considered making one if pressed because "regardless of the veracity of the material, and the truth of the material, a lawsuit requires a tremendous amount of time, effort and expense."

Sincerity, it appears, is spelled with dollar signs.

Chelekis used his growing notoriety to launch a new career as one of the world's first Internet stock touts. His Hot Stocks Whispers and Hot Stocks Review purported to give subscribers the inside scoop on nascent stocks.

Chelekis's write-ups typically carried a disclaimer acknowledging that some companies had paid "a research and promotional fee" but had done so "on the understanding that this was neither advertising nor advertorial, that our opinions and recommendations were based entirely on the merits of their materials and information acquired from other sources."

Junior companies, most based in Vancouver and listed on the Vancouver or Alberta stock exchanges, clamored to obtain coverage. His pronouncements often presaged dramatic share price hikes.

Often enough, they were then followed by dramatic falls. One example was Urban Resources Technologies Inc. of Vancouver, which claimed to have developed a way to convert waste plastic into building materials. Listed on the ASE, Urban was touted by Chelekis as possibly being the next IBM or Wal-Mart of the recycling industry. Its stock soon quadrupled to $1.30 solely on the strength of false sales reports. When ASE officials discovered that Urban president Gordon Muir had quietly dumped one million-plus shares during the run-up, its trading was halted and the company was eventually delisted.

In early June 1996, Business Week magazine in the United States devoted its cover story to online investing. It featured a photograph of and interview with Chelekis. Writer Gary Weiss said he was impressed with Chelekis's Hot Stocks Review, which he described as well-written, interesting and free.

"Chelekis told me the money is pouring in from subscribers who get an extra-fast e-mailed look at his dispatches for a fee. And above all, the dough is rolling in from the companies he writes about... Chelekis says the average fee paid by the companies is $10,000."

Shortly after the Business Week article, The Globe published a story by Mathew Ingram entitled "Controversy dogs investment writer". Ingram reported that Chelekis had "run into choppy water. Some companies have denied the contents of his reports and he admits he is often paid by his companies to write about them."

As Chelekis's personal stock began to slide, regulatory interest began to heighten. The U.S. Securities and Exchange Commission commenced and investigation into his activities. That culminated in February 1997 when the SEC slapped him with $162,000 in fines and penalties. The SEC said Chelekis had received at least $1.1 million cash and 275,000 shares from more than 150 companies, and had knowingly made false statements about six of them, including Urban Resources Technologies. It also said Chelekis newsletters didn't give readers enough information on these financial arrangements. There was some generic disclosure, said the SEC's Paul Gerlach, but it was plainly inadequate.

For me and du Plessis, who had filed his own lawsuit in September 1996, the SEC action was delicious irony: Chelekis had been nailed for the same sort of illicit activity he accused us of committing. This certainly would not enhance his defence, if he had one.

As the trial date approached, the defendants began some last-minute maneuvering. Robinson, the publisher of The Bull & Bear, wrote to Barry Gibson asking him to request an adjournment due to Robinson's heart condition. Gibson refused. Neither Robinson nor his lawyer would show up for the trial.

Chelekis had not made himself available for discovery and it was clear that he was not going to defend himself, either. In an eleventh-hour attempt to derail the proceedings, he hired Vancouver lawyer Andrew Davis to ask for an adjournment on grounds that he didn't know the trial had been set for September 8. However, Gibson noted the trial date had been set nearly two years earlier. Judge Rowan rejected the motion and Davis immediately left the courtroom.

That left only Shore, who had been suddenly stricken by remorse. On Friday, September 5, 1997 - the last business day before the trial opened - he published an apology stating that Chelekis's allegations were completely false. "We sincerely apologize to Mr. Baines and The Vancouver Sun for disseminating this material and for any inconvenience or embarrassment this may have caused."

This imminent arrival of a court date, it seems, tends to greatly concentrate the mind.

George Chelekis was a journalist for hire," Gibson said in his opening remarks to Judge Rowan on September 8, 1997. "Someone with a grudge against David Baines and Adrian du Plessis hired Chelekis to undertake a smear campaign. They financed his trip to Vancouver, the cost of his private investigators and paid him a handsome sum for his efforts. There is simply no other logical explanation for his conduct." (If there was a mystery financier, we never found out who it was.)

Gibson said Chelekis "quickly spotted a second opportunity to make money. By smearing David Baines and Adrian du Plessis, he could make a name for himself with the sleazy Vancouver promoters and launch a new career touting penny stocks." He also told Judge Rowan that accusing a reporter of trading against his column is the most serious attack anyone could make against a journalist: "It is like accusing a lawyer of stealing his client's money or accusing a judge of accepting a bribe. It is the type of allegation that ends a professional career unless disproven."

Reviewing Chelekis's host of defamations, Gibson continued, "It would be difficult to find conduct that was more arrogant, vindictive or oppressive," and urged the judge to make the highest award of punitive damages that a Canadian court has ever given.

Robinson, who had provided The Bull & Bear as a vehicle for Chelekis's libelous comments, was "like the fence who sells guns to criminals. He knew that Chelekis was a pen for hire. He did not pay George Chelekis for his columns and must have known someone else was doing so."

In turn, Shore's conduct "reflects badly on every member of the reputable media in this country... We are now entering a new age when the electronic media is taking over from the print media as the primary source of information. Unfortunately, many of those who control the electronic media have no background in journalism, no sense of ethics, no sense of responsibility, and absolutely no appreciation of the power they wield."

Finally, Gibson dismissed Shore's courthouse-steps apology as a "last hypocritical attempt to save himself," and said the award should be "large enough to teach Mr. Shore that he must develop a sense of responsibility commensurate with the power he exercises as a publisher."

By this time, Shore had emerged as the most important defendant in our lawsuit. Not only was he the only party defending himself, he was the only defendant with libel insurance. That made him our "deep pocket" in the case.

I was the main witness in the five-day trial. Through me, Gibson unveiled the chronology of events and submitted the offending stories and the documented responses. Shore was the only witness for the defence. Questioned by Gibson, Shore admitted he had been concerned about the truth of Chelekis's allegations and that he had asked Chelekis for sources. However, he could not recall the names of any of these sources. He also admitted he did not try to independently verify the allegations. "I didn't know how."

Gibson suggested that Shore knew the stories were "pretty dangerous stuff," as evidenced by the disclaimers Shore ran with each story, and the $2 fee he charged Chelekis for disseminating the material. Gibson suggested these were attempts to absolve himself of any liability. "No, i wouldn't say that," Shore replied.

Searching for a motive, Gibson asked: "What was in it for Robert Shore?" Shore replied: "I'm not really sure there was anything in it for me, except to gain more information and to make contact with companies in the U.S." He added that, if Chelekis was correct about the Baines-du Plessis conspiracy, he had "something significant to offer the industry."

Not satisfied with these responses, Gibson produced a draft of a third article Chelekis had written but not published. It implicated Shore's arch-rival, John Woods, in the short-selling conspiracy. Gibson suggested Shore had another motive: to destroy Wood's credibility: "The first two [stories] take out David Baines and Adrian du Plessis, and the third would take out John Woods."

Shore denied the claim. He said he didn't apologize sooner because he was not certain which of the offending stories he had disseminated. He said he had given instruction for the stories to be deleted from the Bloomberg system and, in any event, such material is automatically purged within four days.

The next morning, I went to the Bloomberg system, located the offending material and printed it out. When court convened, Gibson - in a moment of exquisite courtroom drama - confronted Shore with the copies and asked for an explanation.

"I gave instructions to have it deleted," Shore muttered. His lawyer, Bryan Baynham, admitted that much of what Gibson argued was trued and that we had no choice but to sue. But he argued that his client was the least culpable of the three defendants, that the last-minute apology was sincere and, in any event, the articles had not damaged my reputation. "No one, quite frankly, who mattered, took it seriously except the charlatans or whatever on the VSE."

It took Judge Rowan seven months to render his judgment, but it was worth the wait.

"Chelekis's conduct was arrogant, vindictive and continuous," Judge Rowan ruled. "His intent was to destroy Baines's career." The judge assessed $875,000 worth of general, aggravated and punitive damages against Chelekis. He said the other defendants "willingly participated in the distribution of Chelekis's material, but I am not persuaded their conduct merits an award of aggravated or punitive damages." He held Robinson jointly liable with Chelekis for $275,000 of the general damages, and Shore and his company for $250,000.

The next month, Baynham settled with du Plessis, offering and apology and an undisclosed amount of cash. But any expectation that we would collect on our award quickly subsided when Baynham announced he would appeal. "We expected there would be a substantial award, but we expected [the court] to make a significant allowance for the retraction and apology," he told reporters.

Faced with the additional expense of an appeal, we opened settlement discussions, but no agreement could be reached. The appeal is now expected to be heard in the year 2000. Meanwhile, we haven't collected a cent. In fact, there is still $135,000 in outstanding legal fees borne by my employer. Any possibility of a personal financial windfall is still a very hazy dream.

Chelekis has disappeared from public view. There are occasional rumors that he is still touting stock on the Internet, but nothing has been substantiated. Robinson is still publishing The Bull & Bear, but under a different corporate name. Shore, insulated by his libel insurance, is still running his news dissemination business. I am still writing for The Sun, but my beat has been broadened to include bad business dealings of any kind, not just the stock market.

In July, Rowan's judgment was displaced as the second-highest in Canadian libel history by an Ontario court judgment for $800,000 against reporter Jock Ferguson and The Globe and mail for libeling a North York civil servant.

If the pen is our sword, it clearly cuts both ways.

By Robert J. Flaherty
Equities Magazine, Feb. 1997

Wannabe financial journalist, Hot Stocks Review editor George Chelekis, has been on a bitter personal campaign criticizing conventional financial journalists. For example, his headline in the most recent The Bull and Bear Financial Report rages against "False, reckless and misleading media reports about the price of gold." (Many of his companies are tiny gold companies.)

However, in late February the SEC made some shocking accusations of its own against this highly visible stock promoter, who has tried to protect himself by adopting the guise of a crusading journalist. To settle a civil suit brought by the SEC, Chelekis, without admitting or denying the harsh SEC charges, agreed to a permanent injunction banning him from violating security laws and agreed to a disgorgement payment of $163,000. The SEC notes this is the first case where a stock promoter disgorged not only company payments he received for promoting stocks, but also money he received from his newsletter subscribers under false pretenses.

In 1995 the SEC stated that Chelekis took over $1.1 million from over 150 companies and received 275,000 shares of 10 stocks in return for recommending them.

Not So Hot

Apart from inadequate or misleading disclosure, the heart of the SEC's suit was that Chelekis in six separate cases made false statements about the companies he was hyping, such as they were about to get big contracts, had hot new products or were about to be taken over. After soaring, many of these shaky stocks subsequently collapsed, hurting many of the little people whom Chelekis had persuaded to buy them. Instead of protecting the public, the SEC charged Chelekis with preying on it.

Chelekis' particular forte has been aggressive promotion of tiny, highly speculative and profitless Canadian companies, often traded on the scandal-ridden Vancouver and Alberta Stock Exchanges, plus the Canadian Over-The-Counter Dealer Market and the NASD OTC Bulletin Board. The six companies in the SEC's complaint were Advanced Viral Research, earlier promoted as a "miracle AIDS cure" by Equities favorite financial pornographer, the late, great ex-con newsletter writer John Holmes in his FREE Profit Strategy (See Equities May 1987, page 6 and August 1987, page 5), Canmine Resources, Luminart, whose own earnings estimates have never once been met (See Equities July 1995, page 28), Nona Morelli's II, where the CEO once spent a night in jail (See Equities January 1996, page 36) and Quest Resources (See "Can Paradise Be Regained?" Equities July 1996, page 23) and Urban Resource Technologies.

So wild was Chelekis' hyping that the SEC states four of these companies where he had been paid to promote their shares turned out press releases denying his claims. Chelekis also championed automobile emission purifier EPA Enterprises, where one of the directors resigned when caught forwarding to English investors a false letter of product accreditation from the California Air Resources Board. (See Equities August 1995, Page 64). Chelekis also hyped his favorite gold stock, thinly traded Gallery Resources (Alberta Stock Exchange: GYR.A-C$0.57). In December 1995, he predicted it would rise 600% from C$0.90 to $5 in 1996. Naturally, this false prophesy created a situation where insiders could unload shares, which had been as low as $C0.09 in 1995 and soared in 1996 to $C1.99, on the unsuspecting public.

Apart from Internet distribution of his not so Hot Stocks Review and Hot Stocks Whispers, the Tampa, Fla-based Chelekis, a sometime Scientologist, is a major print contributor to David Robinson's widely distributed tip sheet, The Bull and Bear Financial Report. In the recent 48-page edition Chelekis alone accounted for 7 full pages, 14% of the entire content. On one page he offered a "free workshop" over February 24 to March 3 to these largely unsophisticated, often retired, elderly readers on "How to Invest in Canadian Stocks" in 11 Florida towns—"live presentation in YOUR hometown." He trumpeted that you can "Meet George Chelekis' 7 Best Bet Companies." There is no disclosure on the page stating whether any of these companies has or has not paid Chelekis a dime. The paper also carries big headlines Hot Stocks Review is free to all Bull and Bear subscribers. As the SEC charges suggest, getting & "free" advice from Chelekis can be expensive. Especially so when it includes "HOW to Buy and WHEN to Sell" and "HOW to STOP being tricked or fooled."

Individual investors in Manhattan also were being bombarded in their mail in envelopes from The Bull and Bear Financial Report announcing on March 7 a New York City free workshop presented by Hot Stocks Review, entitled "How to Beat the Penny Stock Market. Reserve your VIP seat now or risk waiting in line for hours to get in! Your Stockbroker Will Probably Be There—Don't Miss Out!" Chelekis was featured as a New York City radio talk show host, because of his weekly activities on WEVD, and also as an Internet guru.

Bull and Bear publisher David Robinson sent a pitch letter to his complimentary subscribers list in the New York area trumpeting nine big Chelekis penny winners (which ironically included now collapsed Bre-X). Robinson failed to disclose even one of his many disasters, like Gallery Resources; which hurt the little people, and Equities doesn't mean Leprechauns! We mean the likes of old retired ladies. (See page 27 of Feb 1997 Equities).

Banned by Bloomberg

In our continuing effort to preserve free speech, we present unpopular points of view and invited Chelekis to speak at Equities Gold Stock Day Conference on "The Coming Voisey Bay Disaster" (See Equities August 1995, page 46). We felt sorry for him after he told Equities he had been banned by Bloomberg following a negative article in Business Week by ace reporter Gary Weiss. Shortly thereafter Chelekis said he was reinstated by Bloomberg. (Bloomberg had refused some of his advertising, but later accepted ads for Chelekis' Hot Stocks Review March 7th Penny Stock workshop criticized above.)

Ironically, Chelekis has since been banned by Equities from any new advertising including his Hot Stock Review insert in our magazine or ever attending any future Equities corporate conference. During his Equities talk Chelekis made the startling claim that in his many trades, he had never once sold a stock at a loss. Several audience members immediately assumed that the only possible way a stock publicist could achieve this was by "front running." This issue was not addressed by the SEC. Chelekis denied any front running. An even more serious issue is when stocks, like EPA, Gallery or Luminart rose after Chelekis got behind them, did his readers and listeners have any warning or chance to sell before company insiders unloaded their own shares? Did readers understand there would be less liquidity when they tried to sell their own shares than when they bought?

On the condition of anonymity—they were worried Chelekis would retaliate against them with negative publicity—several companies informed Equities that they probably would never do business with Chelekis again. "Too many companies George promotes go way up higher than they should, then swoon so the stock is even lower than when George started. Worse, the company then has no credibility so the stock stays low a long time even when good things happen," warned Harry Barr. (See The Good Promoter, Equities August 1996, page 41) Even some Vancouver Stock Exchange companies are keeping their distance from the disgraced Chelekis, worried about their reputations.

Chelekis is also banned from attending the traveling Gold Show, which goes from city to city. However, he rents rooms in the hotels where the Gold Show is being held to pitch attending CEOs and gold bugs.

Shortly before the SEC made its charges public, Chelekis unloaded in Hot Stocks Review on a tiny pink-sheets company called Imagica Entertainment. Amid all his other mindless puffery was this odd story, which was nothing but a string of negatives. Imagica's Tod Lotz, who attended a recent Equities corporate conference, gave this reason: "George was worried about the upcoming SEC charges and he wanted to prove he could write a negative story on a company which paid him, and he made us the victim."

Unquestionably, George Chelekis is an energetic, exciting writer but the activities uncovered by the SEC indicate he does not know the difference between being a financial journalist and a stock promoter. Some of his past associations are with unsavory elements. Just one example, subsequently convicted felon Sonny Block (rhymes with shlock) wrote the introduction for a Chelekis book. As The New York Times late reporter Sidney Fish pointed out in Equities 45th Anniversary issue article on the evolution of financial journalism since the 1929 crash, the journalist in his own stock trading, if any exists, must put his readers before himself, just as an honest, prudent investment advisor should put his clients or fund shareholders before his own personal transactions. People like Chelekis who do otherwise can call themselves journalists but there are better names for them.

"After soaring, many of these shaky stocks subsequently collapsed, hurting many of the little people whom Chelekis had persuaded to buy them. Instead of protecting the public, the SEC charged Chelekis with preying on it."

"As The New York Times late reporter Sidney Fish pointed out in Equities 45th Anniversary issue article on the evolution of financial journalism since the 1929 crash, the journalist in his own stock trading, if any exists, must put his readers before himself, just as an honest, prudent investment advisor should put his clients or fund shareholders before his own personal transactions. People like Chelekis who do otherwise can call themselves journalists but there are better names for them."

"Widows watch your purses. WEVD radio 'guru' George Chelekis, who the SEC labeled a 'stock promoter,' is at it again."

" 'Their first rule of the business is: We eat our young,' he began... Chelekis knows this rule firsthand: In 1995 he made more than $1 million from more than 150 companies he promoted to newsletter subscribers who, the SEC charged, thought they were getting unbiased analysis."

After getting slapped by the SEC, stock promoter George Chelekis, editor of Hot Stocks Review, visited New York City with his latest ploy-a penny stock "workshop" attracting many ignorant investors, including elderly retired widows. He may be coming to a town near you soon. Protect your mother.

By Jeff Nash
Equities Magazine, Feb. 1997

Widows watch your purses. WEVD radio "guru" George Chelekis, who the SEC labeled a "stock promoter," is at it again. The editor and owner of Hot Stocks Review, featured on the Internet and also in print in The Bull and Bear Financial Report, has resumed hyping high-risk Vancouver and Alberta Stock Exchange penny stocks to unsuspecting, unsophisticated individual investors, after settling a civil action with the SEC.

While the SEC was taking a bow for curtailing Chelekis' activities—namely, issuing false stock information even some of the companies repudiated and failing to adequately disclose to Hot Stocks Review subscribers that he was accepting money to promote stocks—Chelekis continued to pitch the public.

In New York City he lured beginning investors to a March 7 "free workshop" on "How to Beat the Penny Stock Market" presented by Hot Stocks Review at the Marriott Marquis. He had just finished a tour of 11 Florida cities, ripe with those living on retirement income and savings. An advertisement for the event mailed to people outside the investment community reached retired elderly widows, city workers, dietitians, secretaries and security guards. It encouraged early reservations to avoid long lines. From 10 a.m. to 8 p.m., "Find out how to discover potential winners early on. Over 30 speakers."

While many told Equities they had come to learn about the stock market, the "workshop," however, was nothing more than a promotional pitch by 12 thinly traded, speculative Canadian stocks, of which one was mislabeled a "Nasdaq OTC Bulletin Board" company, plus one out-of-place private U.S. company which was going public. And while there may have been more than 30 speakers, the advertisement failed to say that most of these were CEOs pitching their own speculative and generally money-losing penny stocks, hardly suitable fare for beginning investors.

Hosts of the conference also invited guests to visit the "shopping mall," a small room connecting to the main ballroom which had tables set up for each of the 13 presenting companies to distribute their materials—annual reports (if any existed), published recommendations from Hot Stocks Review and the Vancouver-based Stock Research Group and promotional brochures. Material on Chelekis mentioned he contributed articles to many well-known publications including Equities Magazine (which is false, though he has advertised.) His material also states the Vancouver Stock Exchange, "once the world's worst stock exchange," is now "one of the most heavily regulated stock exchanges in the world." There is no mention of the many scams still trading there, and that even the best VSE stocks should be investigated carefully.

The presenting companies were Network Gaming International Corp. (VSE: NGQ-C$1.10), a tiny developer of computer-networked Video Bingo systems; Nora Exploration Inc. (Montreal Exchange: NXI-C$2.10), a diamond- and gem-mining company, whose three-year projections show revenues more than 240 times last year's actual $76,000; Poplar Resources Ltd. (VSE: PPX-C$0.59), another diamond-mining company; Enterprise Development Corporation (Alberta: ED- C$0.70), an oil-exploration company; Authentex Software (CDN: AUTX-C$0.45), a supplier of data-protection software and services; International Wayside Gold Mines Ltd. (VSE: IWA-C$1.18), a gold-mining company; Global Cogenix Industrial Corporation (VSE: GGX-C$1.20), a telecommunications company; Gerle Gold Ltd. (VSE: GGL-C$1.95), a gold-mining company; Primo Resources Ltd. (VSE: PRI-C$1.70), a mining company; Toronto-based The Tracker Corporation of America (NASD OTC Bulletin Board: TRKR-$0.29), an identification and recovery service; Anvil Resources Ltd. (Alberta: ANV-C$0.61), a mining company; Canadian Payphone Corporation (VSE: CPY-C$4.60), a telecommunications company; and Baltia Air Lines, Inc., a private U.S. company.

Not even Tracker, whose identification and recovery service is endorsed by the International Association of Chiefs of Police, was substantial enough to qualify for listing on Nasdaq, though many of Chelekis' paid promotions in the past have said they would list there in the future, but never made it. Tracker distributed to this very unsophisticated audience a misleading report which stated their shares traded on the "Nasdaq OTC Bulletin Board," which doesn't exist. This tawdry tactic is used by speculative Canadian companies to fool ignorant investors into thinking the company is more substantial than it is, although most promoters realize the NASD OTC Bulletin Board, which does exist, has no affiliation with Nasdaq, which has much higher and stricter listing standards.

Also presenting as part of its road show for an Initial Public Offering was Baltia Air Lines, Inc., out to raise $6 million in a $6 per unit best-efforts IPO to start up non-stop flights from New York City to St. Petersburg, Russia. Baltia recently paid $7,000 to attend an Equities conference and is suitable, we think, only as a businessman's risk. It is totally unsuitable for the uninformed working poor in Chelekis' audience.

Baltia Air Lines Vice President Brian Glenn explained, "We're novices in investor relations and are just learning, but we believe we made a mistake presenting there." Baltia spoke twice. They were scheduled for 7:30 p.m., but Glenn protested because he believed no one would be there. He was right—only 11 people stuck around. So Chelekis also had Baltia present earlier at 3:00 p.m. to about 700 people. Glenn estimated nearly 2,000 people showed over the course of the day.

Still Glenn and Baltia were not happy. "I felt embarrassed to be presenting among those companies, some of which seemed to have both feet on a banana peel," he said. "I'll never go to a Chelekis show again.

"A lot of people were shabbily clothed, carried plastic bags and looked like they were right off the streets," he continued. "We want to reach people of substance, who understand the risks and also what we are trying to do."

Glenn told Equities Baltia paid Chelekis to present, but this was not mentioned before they were introduced. "I wasn't aware of any disclosure while I was there," Glenn said. "Actually, I never was introduced to Chelekis. Baltia was introduced to the audience by a gal in the morning and her husband at night. Neither one said anything about our fee. We paid $1,500 in cash and a little bit of stock. Chelekis was almost willing to accept anything."

At least Baltia had prospectuses available with the following warnings in very large, bold type: THE SECURITIES OFFERED HEREBY ARE VERY SPECULATIVE, INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE SUBSTANTIAL DILUTION AND SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD THE LOSS OF HIS ENTIRE INVESTMENT. SEE "RISK FACTORS" AND "DILUTION."

Because the other companies present were not in the midst of a public offering, their materials did not have a similar warning, but they all should have, especially the diamond-prospecting companies and others with unbelievable projections.

Eliminating the Paper Trail

Strangely, when I asked a woman working one of the registration booths for a schedule of speakers, she handed me one but said she needed it back. It was her only copy. Later in the day, I approached a different woman working at one of the other desks and got the same reply.

Chelekis opened the workshop with a short speech on "How to Beat the Penny Stock Market." Disguised as a crusading financial journalist fighting for the little guy, the retail investor, he spoke of the horrendous acts committed by Wall Street insiders, the brokers and security traders.

"Their first rule of the business is: We eat our young," he began. "They will eat whoever they have to that is in their way to making their company work or to make sure their pockets are lined before yours."

Chelekis knows this rule firsthand: In 1995 he made more than $1 million from more than 150 companies he promoted to newsletter subscribers who, the SEC charged, thought they were getting unbiased analysis.

Chelekis went on to rail against discount brokers, "who will rip you off in ways you have no idea how you're getting ripped-off. How many here use Schwab?" he asked the crowd. "How many here know that the trader for Schwab took a nice, very expensive vacation in the fourth quarter? The issue of soft money is only beginning to be looked at by the SEC. Soft money including wild perks, sort-of anonymous first-class tickets to Rio de Janeiro or Milan or Paris. Special vacations."

He assumed the role of the good guy on the side of the SEC, rather than one cited by it, and attempted to frighten the audience. "Most of you will not beat the penny stock market no matter what I tell you," Chelekis said. "Most of you who are attracted to the penny stock market are gamblers by nature, and gamblers tend to lose to the house."

George's Solution

Not to worry. According to Chelekis, the first thing, if you're going to play Canadian stocks, is to get a good broker, preferably one off of his list on one of his latest handouts, "How to Trade Canadian Stocks."

"Some are surprised I put their names in there," he commented. "I've been getting some strange phone calls."

Canadian stockbrokers are prohibited by law from directly soliciting American investors. It is legal, however, to contact a Canadian stockbroker to buy or sell Canadian stocks, Chelekis told the audience. The following Canadian brokers, who Chelekis states specialize in many stocks covered by Hot Stocks Review, are: Dorothy Hoffert, Wolverton Securities; Andy Chau, Merit Investments; Robin Chandler, McDermitt, St. Lawrence; Walter G. Chomichuk, Midland Walwyn; and Edward Johnson, Pacific International.

Chelekis also added, "You may wish to also consider these U.S. brokers who closely follow Canadian stocks: James Ottesen, PaineWebber, Walter Raby, National Securities; Richard Radez, David A. Noyes."

Next, Chelekis hit the security traders. "Let's say you're rushing off to work and you want to buy 10,000 shares of this or that and you don't even give it a second thought. You buy the 10,000 and if it's a good market and the thing is doing well, your order won't get taken. It will be taken with people coming in ahead of you. Traders seeing your order coming in, jump in to play you for a few pennies."

Seemingly on a roll, Chelekis took aim at his fellow newsletter writers. "The more sophisticated newsletter writers who are above suspicion, beyond any trouble, do the little things like call up the company and say, ‘You know I really like your stock. It's trading at $0.80. I'd really like to have 100,000 shares at $0.70.' And then they come out with a fantastic buy recommendation. That comes from an actual example of one of the best-known gold analysts in the U.S. I won't mention any names because they already hate my guts, beyond belief."

Then Chelekis said he'd like to get out of the way and let some of the company presenters speak. Leading off was a company Chelekis liked, International Wayside Gold Mines Ltd. Chelekis disclosed the company paid him $9,800 "a long time ago" to advertise in Hot Stocks Review. "But," he continued loudly, "I have probably thousands of companies to choose from. Hundreds pitch to me every week, and when I come out with ‘I like this company,' it's because it has certain credentials that go with it."

Chelekis failed to mention that a short time ago, in Hot Stocks Review, Winter 1997, International Wayside was featured as the "Best New Gold Exploration Pick: First Quarter 1997." In that issue, Chelekis disclosed each company featured in that issue engaged a media consulting and investor relations company, LAPR, Inc., the sole shareholder of which is Lisa Petrella, Chelekis' wife. It was also noted that LAPR subsidizes Hot Stocks Review, Inc.

Also not vocalized was in the latest 12 months hyped International Wayside Gold Mines' stock had soared 210% from only C$0.38 a share. Clearly the risks in buying it have risen with its inflated stock price.

Radio talk-show host Bill Bresnan was the next non-CEO to speak to the audience. He addressed the issue of when to sell your stocks. Like a talk-show host, Bresnan left the dais with a portable microphone and mixed with the audience. He stated he was pleased to see so much gray hair because he wanted to be a "financial gerontologist." Old people age 55 and up often have no debt and can afford to buy things. He said he was sure a few in the audience were used to handling "big money like $5,000 bills." His "eat, drink and be merry" advice was spend what you don't need now and enjoy yourself because money is no good in the grave. However, in this setting, with so many Vancouver promoters circling, "hold on to your cash" would have been more appropriate.

Throughout his speech, a silver-haired retired secretary repeatedly turned to me and commented, "Isn't he wonderful?"

From there, it was back to company presentations. No mention, if any, of payment was disclosed before the next two companies spoke.

I stood at the back of the room and chatted with a few disappointed attendees. One, a middle-aged dietitian, said she thought it would be an educational seminar on how to invest in penny stocks. "I didn't know they were going to try to sell me penny stocks," she said. Another, a city worker, wondered if the presenting companies were examples of "winner penny stocks." Two retired women didn't quite understand the format, but one did note, "It's free."

On my way out, I stopped at the Hot Stocks information desk and asked how the presenting companies were selected.

"It's open to the public," said Mary Arch, who wore a LAPR badge and worked the desk. "Any public companies could call up. In fact, they were looking for more companies."

"Do the companies pay a fee?" I asked.

"I don't know the answer to that question, but if you want to check back in a half-hour and speak to my manager..." I didn't wait around. I had seen enough.

Stockwatch Business Reporter, Sep. 12, 1997

The libel, slander and bad feelings trial between Southam Inc and David Baines as plaintiffs and Robert Shore, David Robinson and George Chelekis as defendants continued in BC Supreme Court on Thursday, September 11, 1997.

Resuming his testimony before Mr Justice John Rowan was Robert Shore, the owner, publisher and admitted libeler at Market News Publishing Inc. Mr Shore and Market News are accused of distributing two of Mr Chelekis's articles and a press release that impugned the integrity and honesty of Vancouver Sun business reporter David Baines and Howe Street investigator Adrian du Plessis.

Neither Mr Chelekis nor David Robinson, publisher of the Florida-based tout sheet Bull & Bear, are represented in court, though both attempted unsuccessfully to derail their trial. Mr du Plessis is pursuing a separate legal action over the libelous allegations that he conspired with Mr Baines and unnamed short sellers to profit from driving down the price of a number of VSE companies over a six-year period. In addition, Mr Chelekis told about 150 people at a May 1996 investment conference in Vancouver that Mr Baines was HIV positive and had not told his wife.

Under cross-examination by Southam counsel Barry Gibson, Mr Shore said the first time he met Mr Chelekis was when Howe Street habitue, David Elrix, brought to him the August 1994 edition of the Bull & Bear, which contained allegations of impropriety on the part of Messrs Baines and du Plessis. Mr Elrix thought Mr Shore ought to meet Mr Chelekis, and helped set up a meeting with its author. Mr Shore then met Mr Chelekis -- for the first time ever, he told the court -- at the Four Seasons hotel in late July or early August 1994.

Asked why Mr Chelekis was in town, Mr Shore said he believed the Florida-based writer was attending one of the many roadshows organized by newsletter writers and similar species to promote their products and generate subscribers. "Did he indicate that he was a journalist for hire?" Mr Gibson asked, meaning that he was paid specifically to write the kind of articles that promoters of penny-stock companies wanted to read. "At that point, no," Mr Shore replied. "I believe this was a loss leader for him, to get subscribers for his newsletter."

Mr Shore said he could not recall when he figured out Mr Chelekis accepted money or stock for his articles. Asked if he knew by late August or early September 1994 that Mr Chelekis accepted shares in the various companies for which he wrote nice things, Mr Shore said: "I'm not sure."

Mr Gibson also wanted to know whether Mr Shore inquired as to who was paying for Mr Chelekis's trips to Vancouver, which consisted of himself, the "research assistant" Lisa Petrella and high-class accommodation. Mr Shore replied he did ask, but that Mr Chelekis said that no one but himself was picking up the tab.

Mr Shore said he subsequently met with Mr Chelekis one or two more times.

Mr Gibson spent considerable time enquiring whether or not Mr Shore made efforts to verify the veracity of the material he accepted for publication and possible publication. (Mr Shore acknowledges disseminating the August Bull & Bear story and a press release tipping the October 1994 Bull & Bear story. However, he claims the second story was sent out inadvertently and without his authorization.)

Mr Shore replied that he asked Mr Chelekis for the names of the sources for specific allegations contained in the August story and was assured credible people gave him the information; both that and the subsequent October Bull & Bear stories offered no attributions. Mr Gibson pressed Mr Shore, demanding to know the names of one -- even one -- individual, gleaned from his several meetings with the writer, that formed the basis of the allegedly defamatory material in the first article. Mr Shore said names were mentioned, but his memory had gone blank: "I don't remember any of the names."

"Did you take notes?" Mr Gibson asked. "No," replied the electronic journalist.

Mr Gibson pressed further: "I just want you to name for the court one name as a source for the first article." Replied Mr Shore: "I can't say he'd named any specific people ... only that he'd spoken with a number of people."

Mr Gibson then wanted to know about the $2 fee he charged Mr Chelekis for publishing the articles. "I was under the mistaken impression that he'd been very careful about the material and that I could rely on him for the veracity of the material," Mr Shore testified. From that, Mr Gibson posited that Mr Shore knew the material was "pretty dangerous stuff" and that he needed to take measures to protect himself from libel, which he thought he did by charging Mr Chelekis $2 for publishing the material and by printing three disclaimers on the articles absolving himself from responsibility for their content.

"You wanted to transfer all responsibility to Mr Chelekis?" Mr Gibson asked. "No, I wouldn't say that," Mr Shore replied.

Mr Gibson read aloud the laborious disclaimers that were transmitted with the electronic version of the October story sent out over the Star Data and Bloomberg news-wire services: "Distribution of this article has been paid for by the author, and as such the text is carried in full and unedited. Distribution of this material has been paid for by the author, who takes full responsibility for its contents. Opinions expressed here are solely those of the author and do not necessarily reflect the opinions of the publisher or distributor."

Mr Shore said he had never before charged to distribute a bylined article, nor had he ever before placed such a disclaimer on a story.

"Didn't you ask the names of sources for specific allegations" in the second story? Mr Gibson asked.

Mr Shore replied, "I was told there were sources for the allegations."

"I just want to know any of the sources for the second article," Mr Gibson demanded. "Which did you check on?"

Mr Shore replied, "Some of the people that Adrian du Plessis traded with on the floor . . . and I don't remember their names."

"Did you ask for the sources for allegations that Baines was trading on his column?" Mr Gibson asked.

"Yes, I asked," Mr Shore told the court. "I relied on the assurance he had a source."

"Didn't you make any independent effort to verify" allegations Mr Baines traded against his column and kept his short-selling riches in Panamanian banks, Mr Gibson asked.

"I didn't know how," Mr Shore replied.

Mr Gibson then levelled a hitherto unmentioned charge that Mr Chelekis was planning a third article - this time bringing into the alleged short-selling conspiracy Stockwatch owner and publisher John Woods. This was presaged in an Internet posting which referred to Mr Woods and Mr Baines as two of Vancouver's "terrible trio" of stocks reporters (Mr du Plessis was the third).

"Did you encourage him to add Woods into it?" Mr Gibson said. Mr Shore replied only that Mr Woods may have been a subject for discussion. "That's possible," he said. "I don't recall."

Mr Gibson then wondered aloud whether Mr Shore understood that an article of this kind could spell the end of Mr Baines's career. "Mr Chelekis assured me he had sources" for all of his allegations, Mr Shore countered.

The Southam counsel then returned to his line of questioning about the third story that may have been planned but not written. "The first two take out David Baines and Adrian du Plessis and the third would take out John Woods," Mr Gibson said. Mr Shore denied the statement.

Mr Gibson then pressed Mr Shore on his motives for taking such a risk in publishing the Chelekis material. "What I want to know is, what was in it for Robert Shore?" Mr Gibson asked. "We were attempting to get more information, to expand the company, to get more news (from the US)," Mr Shore said. In addition, if Mr Chelekis was right, he added, that meant Mr Chelekis had "something significant to offer the industry."

"But what about Bob Shore?" Mr Gibson demanded.

"I'm not really sure there was anything in it for me, except to gain more information and to make contact with companies in the US," he said.

Mr Shore also confirmed he had later travelled to a gold show in Florida and had stayed overnight as a guest in Mr Chelekis's home, adding that he subsequently met with the tipster-cum-promoter "a couple of times" when he visited Vancouver, and talked many times over the phone.

Mr Shore was sued by Mr Baines and Southam in May 1995. Mr Gibson then asked whether Mr Shore took any steps at that time to "find out facts" from Mr Chelekis about the story and who provided information on the specific allegations. Mr Shore replied that he did, and that Mr Chelekis assured him the sources were solid and that he should not worry.

"Did you worry?" Mr Gibson asked. "Oh, I worried," Mr Shore replied.

Mr Shore said he tried to ensure that Mr Chelekis would appear in court to defend himself and provide information about his sources, adding he last spoke to Mr Chelekis "eight to 10 weeks ago, possibly longer." (In fact, Mr Chelekis didn't appear, claiming through a lawyer he hired by cell phone on September 5 that he didn't know about the court date. Lawyer Andrew Davis requested a delay of proceedings on September 8, but Mr Justice Rowan denied the request, agreeing with Mr Gibson that he should have known about the date because it was set in late 1995.)

After the June discovery hearings, Mr Shore tried to contact Mr Chelekis but was told his numbers had been disconnected. That followed Mr Chelekis's plea of no contest on February 25, 1997 to charges by the SEC that he was touting shares in an illegal fashion and was fined US$162,000. After that, his presence on the Internet ended.

Mr Shore, the self-procla