12-05-2025
- Business
- The Market Online
9 Million Fake Shares. One Broken System. Zero Accountability
By Lyndsay Malchuk | Stockhouse Publishing
There's a slow-motion ambush happening in Canada's capital markets—and it's targeting the junior mining sector.
The weapon? A 2012 rule change that killed the 'tick test' and handed short sellers carte blanche to crush small-cap companies. The result? Phantom shares, spoofing, and regulatory apathy that's draining billions from a sector critical to Canada's future.
Terry Lynch isn't mincing words: 'This isn't about market strategy anymore. It's about manipulation.'
As CEO of Power Metallic, founder of Save Canadian Mining, and sits on the Board of Directors for PDAC, Lynch has had enough. And he's naming names.
'When they scrapped the uptick rule, I said, how does this work?… You're testing on the Russell 3000. The average market cap there is $300 million. Ours is $15 million. This makes no sense.'
But the regulators didn't care then—and they still don't.
'We're losing every day. Enough already. Enough pushing the ball down the road. Wake the hell up. Stop this rule.'
Power Metallic uncovered 9 million fake shares in its own trading. That number has since more than tripled.
'We asked the investment banks for an explanation—crickets. Finra and the IIROC don't respond. They say they 'don't deal with individual complaints.''
Lynch likens naked short selling to counterfeiting: 'If you photocopy your car permit ten times and sell it to ten people, that's fraud. You go to jail. But it happens every day in the stock market.'
He doesn't believe Canadian regulators were outright complicit—but he's clear they've failed spectacularly.
'It's tough to admit you're wrong. But the reality is: you've been wrong on this issue. And you've allowed it to go on.'
He points to South Korea, which shut down short selling in five days. Meanwhile, in Canada, 'they say it'll take six months.'
'That's bullshit. It's lack of political will.'
Canada is sitting on the critical minerals the world is desperate for—and yet junior explorers are getting slaughtered.
'We used to raise $100 billion a year. Last year? $20 billion. Only the top 50 companies got 70% of it. Everyone else is starving.'
Even as gold rips, the juniors aren't moving. Why?
'Because every time an investor backs a junior, the stock gets sold off. Discoveries don't matter anymore. Nobody gets rewarded.'
Lynch wants three things: the tick test reinstated, naked short selling banned, and short market exemptions eliminated.
'This should be our glory years. But without capital, we're dead. This isn't just a mining issue—it's an equity market crisis.'
And he's backing it up with action. Save Canadian Mining is raising $250,000 to re-launch its advocacy campaign, calling on junior CEOs to step up.
'Power Metallic gave $25,000. We're asking others to join—$1,000, $5,000, whatever you can.'
With a minority government in place and a Prime Minister who says he supports mining, Lynch is clear:
'This is a national security issue. It's in the Prime Minister's purview. Fix the capital markets. Or watch this industry die.'
Because while Canada dithers, Australia is eating our lunch—and the U.S. is circling like a hawk.
'We got here because we're weak. We need to get strong again. And it starts by cutting the head off the snake.'
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Terry Lynch doesn't sugarcoat a thing—and that's exactly why you need to hear this conversation. From phantom shares to regulatory cowardice, he lays bare what no one else will say out loud.
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