On the one hand, Marquest controls a number of broad portfolios of holdings and “series” of holdings, such as “Explorer Series Fund” (posted by Luker). On the other hand, Marquest also offers equity funds according to the targeted purposes and according to the targeted selling points. Besides the Flow-Through Tax Shelters, Marquest offers many other Classes and Categories and Subcategories of funds. There are easily over one hundred individual funds. Apparently, some funds draw equities from other funds. It’s all very confusing and nearly impossible to follow on the website, nor is the information complete or updated.

One overriding question is: How are these funds and limited partnerships commingled? Why do I ask? Because it’s more than a technicality as to how these financial instruments have been designed to self-destruct. It’s more than a technicality as to how they conflict with one another and how they conflict with the best interests of the Shareholders of the underlying equities. It’s more than a technicality because the way they’re designed is guaranteed to cause destructive trading events, cascading, one-after-another, out-of-control.

Before what’s known as “the dissolution date,” the administrator of all the limited partnerships (#1) is obligated to dump all the equities indiscriminately, within narrow and conflicting and overlapping timeframes and (#2) is obligated to “rollover” the proceeds into a “RRSP-eligible corporate-class mutual fund.”

The Marquest website presents flow-through fund information haphazardly. In places, the list of funds is more up-to-date, than in other places. In one place, there’s a long list of flow-through funds. Elsewhere, there are additional much shorter lists, containing different flow-through funds. Also there’s a statement on the website, stating that there are additional funds, which are not on the website: “For tax information on funds not listed, please contact Client Services.” As follows is the best I could piece together, using the Marquest website as my reference point.

“Dissolution Dates” of “Listed” Flow-Through Limited Partnerships Already “Dissolved”:

1) April 21, 2013 – Marquest-MineralFields 2012 Super FTLP (MIN1200).
2) Date Missing From Website – Marquest-MineralFields 2012-III Super FTLP (MIN1201).
3) April 21, 2013 – Marquest-MineralFields 2012-II Super FTLP (MIN 1202).
4) April 21, 2013 – Marquest-MineralFields B.C. 2012 Super FTLP (MIN 1203).
5) April 21, 2013 – Marquest Mining 2013-I Super FTLP (MIN1301).
6) April 26, 2013 – Matrix 2012 Enhanced Short Duration FTLP.
7) July 2, 2013 – MineralFields 2011-V Super FTLP (MIN1106).
8) September 24, 2013 – MineralFields 2011-VI Super FTLP (MIN1107).
9) November 8, 2013 – Marquest-MineralFields Quebec 2012 Super FTLP (MIN1204).

10) February 14, 2014 – Marquest 2013-1 Mining Super FTLP.
11) March 14, 2014 – Matrix 2012-I FTLP.
12) April 21, 2014 – Marquest Mining Quebec 2013-I Super FTLP (MIN1304).
13) May 23, 2014 – Marquest Mining B.C. 2013-I Super FTLP (MIN1303).
14) May 23, 2014 – Marquest-EnergyFields 2012 Special FTLP.
15) June 30, 2014 – Marquest Mining 2013-II Super FTLP (MIN1305).
16) June 30, 2014 – Marquest Mining Quebec 2013-II Super FTLP (MIN1306).

“Dissolution Dates” of “Listed” Flow-Through Limited Partnerships Not “Dissolved”:

17) November 30, 2015 or Earlier – Marquest Mining 2014-I Super FTLP (MAV1401)
Inception Date – July 7, 2014.
18) November 30, 2015 or Earlier – Marquest Mining Quebec 2014-I Super FTLP
Inception Date – December 6, 2014.
19) November 30, 2015 or Earlier – Marquest Mining B.C. 2014-I Super FTLP
Inception Date – December 6, 2014.
20) November 30, 2015 or Earlier – Marquest Mining 2014-II Super FTLP (MAV1405)
Inception Date – Unknown.
21) November 30, 2015 or Earlier – Marquest Mining Quebec 2014-II Super FTLP (MAV1406)
Inception Date – Unknown.
22) November 30, 2015 or Earlier – Marquest Mining B.C. 2014-II Super FTLP (MAV1407)
Inception Date – Unknown.

A number of legal and moral and ethical questions come to mind as to what is permitted and what is not permitted (and what the remedies are). For answers, I will consult with an attorney who specializes in these subjects and with other individuals who are more expert than me.

Some of the legal and moral and ethical questions that come to mind are:

#1) The General Partner’s act of dumping large blocks of the thinly-traded Marquest Flow-Through shares of Client Group A will crush their price. Conceivably, that will be inimical to the financial interest of Marquest Flow-Through Client Group B, who hold the same equities with a later exit (“dissolution”) date. Is The General Partner permitted to act in favor of one group of investors under his control to the detriment of another group of investors under his control?

#2) Is Marquest or is The General Partner allowed to perform trading or other initiatives—which will have material financial consequences—without informing the interested Marquest parties of the potential (or even likely) materially adverse possibilities?

#3) The “Offering Memorandum” uses the words “Tax Shelter” as a synonym and substitute name for how it refers to itself. There’s usually an eleven month holding period, after which the “Tax Shelter,” according to its own terms must be “dissolved” and will be “dissolved.” The “Tax Shelter” investors are not even informed of the names of the companies in the “Tax Shelter,” which are held in the “Blind Pool” for them. Should such people—the ones who are in-the-dark, even so far as the companies’ names—cast the decisive votes to elect its preferred candidates to those respective companies’ Boards of Directors? Or, should they be required to recuse themselves?

#4) At least, The General Partner of the “Tax Shelter” knows the names of the companies in the “Blind Pool.” But his only immediate interest in the “Blind Pool” is his legal obligation to liquidate it, because “at dissolution,” he’s obliged to rollover the proceeds “on a tax-deferred basis into an RRSP-eligible corporate class mutual fund.” Nonetheless, the sheer number of shares often gives him decisive voting power. So, the guy whose job it is to indiscriminately dump all the shares he’s voting, should—as happened to Fancamp two years ago—be the one to cast the decisive votes to elect his choices to the Boards of Directors? Or, should he be required to recuse himself?

#5) When a company (such as Fancamp) initiates a Flow-Through financing, is it a material fact requiring public disclosure that the company (such as Fancamp) will be required to deposit tens of millions of new shares into a “Blind Pool,” which will be indiscriminately dumped into a thinly-traded market, all at once (or nearly at once), within eleven months? Should it also be considered a material fact requiring public disclosure that The General Partner who controls the “Blind Pool” will likely vote the new shares in favor of Marquest’s choices to the Board of Directors (and those choices will likely be the ones who favor continuing to use Marquest Flow-Through financing)?

#6) Aside from actual trading, has Marquest established safeguards to prevent it from recommending Flow-Through Limited Partnerships to one group of its clients that are inimical to the present holdings or interests (acquired earlier) of another group of its clients? As well, even if that were permitted, does Marquest make it a practice to inform Client Group B that what it might be doing for Client Group A could potentially (or likely) be damaging to the financial interests of Client Group B?

#7) Being there’s so many funds under Marquest’s control, does Marquest have safeguards in place to prevent what it does with its own equity portfolio from conflicting with one or the other of its clients’ portfolios?

#8) Being that I never resided in Canada, I know nothing about Canadian tax laws. However, looking at it, purely from the logic of qualifying for a tremendous tax break, I don’t understand what good deed the investor in Marquest’s Flow-Through Limited Partnerships did to earn the tax break. I don’t know if that’s because the laws were carelessly drafted or whether it’s because the regulations have been poorly enforced. On Marquest’s website these “Tax Shelters” are promoted as the least risky of all the categories of funds Marquest administers because of their “short hold periods.” To me, getting a tax break for investing in resource exploration makes no sense when, at the exact same time the investor signs papers to put money in to buy “the Blind Pool,” the investor signs papers to sell the identical “Blind Pool,” even before the buy gets executed. In other words, the investor files papers for a refund even before receiving an investment that’s so worthy, the information as to what’s in it is unavailable. To me, whatever benefit the investment brings to the Canadian mineral resource industry is completely washed away by the getting-out process being guaranteed at the same time the getting-in process is taking place. As a reward for Marquest using this hocus-pocus as their business model, its executives get to earn a good living; and its customers get to live tax free (or close to tax free); and Fancamp Shareholders get to take a shellacking. Is there anything we can do about this?