I thought everyone on this thread would be interested in this story concerning our
favorite broker Lew Lieberbaum - featured by "The Street" today.
Truth Serum Features & Columns
Sex Suit Isn't First Brush with Trouble for
Lieberbaum Brokerage Firm
April 29, 1997
By Andrew Morse
Staff Reporter
It's got to be tough being a broker at Lew Lieberbaum & Co., the Long
Island brokerage being sued for $100 million by three former female
employees who claim they were sexually harassed.
Besides allegedly organizing lesbian strip shows, fondling
staff members and assaulting the trading assistants, there are
all those little hassles -- like underwriting terribly performing
stocks and fending off complaints from a roster of regulators.
And there are those administrative time-wasters, like keeping
track of which states have censured, fined or suspended the
company's operations. What a chore!
Tuesday's news was just the latest -- and certainly the most
blatant -- example of sleazy practices at Lew Lieberbaum, a
company so disreputable the NASD Regulation's 22-page
list of disciplinary information concerning the firm took
13 minutes to fax. And that was just the summaries.
Since 1994, the company has racked up 30 citations, according
to the disciplinary arm of the National Association of
Securities Dealers. It's been fined in Indiana and
Connecticut, had its operations suspended in
Colorado and was investigated by Pennsylvania and Florida. It's also been fined -- repeatedly -- by the NASD itself. On Feb. 8, 1995,
the NASD fined the company $280,000 and ordered
it to pay restitution of more than $323,000.
And the firm has participated in some interesting deals.
It helped secure financing for Kushner-Locke (KLOC:Nasdaq),
the L.A.-based low-budget studio that will film a docudrama
on the Heaven's Gate cult. A series of offerings underwritten
by the firm have underperformed -- by a lot.
KLOC, for example, has given up 74.3% since it filed with the
Securities and Exchange Commission last year announcing plans for
Lew Lieberbaum to help it flog 5 million units, packages of common
shares and warrants. Kushner-Locke, which employed the Heaven's
Gate cult to construct its Web page, crashed to 31 cents from $1.22.
Lew Lieberbaum also brought Help at Home (HAHI:Nasdaq), which
provides medical services to invalids, public in December 1995. The
company has slid 23.9% to 4 3/8 since.
Back in November 1993, Lew Lieberbaum earned a 30-cent
commission on each of the 4 million dollars it helped Hain Food Group
(NOSH:Nasdaq) raise.
A more normal commission would have been between 5 and 10 cents,
says Steven Tuen, an analyst at IPO Monitor. "That seems a bit high to
get a deal done."
Calls to the company's headquarters were greeted with a polite-but-terse "no comment," followed by the click of the receiver being replaced in its cradle.
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