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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: pilapir who wrote (9672)	4/17/2002 8:52:07 AM
From: StockDung	Respond to of 19428

RAY DIRKS makes forbes->Have You Heard the One About the Anthrax Kit? Christopher Helman, 04.29.02 Veteran stock tout Ray Dirks tries a funny place to push a stock, and sends people away howling. He thought the company was legit. No, really. When Raymond Dirks, Wall Street's serial stock promoter, arranged a press conference to have the chief executive of something called Vital Living flog a new product, his chosen venue was ironically appropriate. Last Oct. 23 Vital's boss, Donald Podrebarac, stepped up to the podium at the Friars Club, that wood-paneled, down-at-the-heels Manhattan townhouse where hall-of-fame comedians like David Letterman and Jerry Seinfeld subject fellow Friars to howlingly funny roasts. Dirks, 68, has been a Friar for a decade, possibly because of his hilarious explanations over the years for stumbles with securities laws, fines against him and his brokerages and a finding of fraud. Last fall he invited Podrebarac to speak about Vital Living's new do-it-yourself, at-home anthrax test kit. The press conference was timely, right in the midst of the post-Sept. 11 anthrax scare. And it came on the heels of a press-release-hyped market pop. Vital Living's stock had jumped to $2.08 a share from 6 cents in early October. That endowed the $1.7 million (supposed 2001 sales) firm with a market value of $36 million. Daily volume had zoomed to 9 million shares from 1,100. Was this a hot stock or what? Flanked by framed faces of funnymen, Podrebarac boasted that orders were flowing in from retailers like Ace Hardware, and demonstrated how the product would work by dipping a faux anthrax-tainted cotton swab into a vial of red liquid. Were anthrax spores present, he said, the liquid would turn yellow in a day or two. During his demo, Podrebarac reportedly fumbled one of the test vials, prompting the amused crowd to call out: "Don't drop it!" BusinessWeek Online and Newsweek's Web edition wrote credulous stories. But most reporters came away thinking PurTest Anthrax was a knee-slapper. Within two weeks the stock dropped to just 60 cents. On Nov. 29 the FBI raided the company's Matthews, N.C.offices. Meanwhile, the U.S. Attorney for the Southern District of New York is investigating whether PurTest was a criminal hoax, and the SEC is looking into possible charges of insider trading. In February he settled charges of deceptive advertising with the Federal Trade Commission, without admitting liability. Dirks says he never personally owned any Vital Living shares but admits his Dirks & Co. traded the stock and opened some new accounts for enthusiastic buyers. With the hubbub over, he no longer recommends Vital Living, now trading at 19 cents, and shrugs off his part in the affair as all in a day's work.

To: pilapir who wrote (9672)	4/17/2002 2:34:22 PM
From: StockDung	Read Replies (1) \| Respond to of 19428

SEC May Join Analyst Investigation By MICHAEL GORMLEY .c The Associated Press ALBANY, N.Y. (AP) - Federal regulators met with New York Attorney General Eliot Spitzer on Wednesday to determine whether they should join his investigation into Wall Street analysts accused of giving positive stock ratings to companies they were criticizing among themselves. Securities and Exchange Commission officials were also being briefed by Spitzer's fraud prosecutors on the status of his investigation into analysts at Merrill Lynch & Co. and some of its rivals, said a source familiar with the matter who spoke on condition of anonymity. A decision by the SEC to take part in the investigation into allegations of analyst conflicts of interest would elevate the probe to a much more significant level. SEC spokesman John Nester declined comment Wednesday on the agency's role in the investigation. Spitzer has said he would welcome SEC involvement in the investigation, but is willing to go it alone if federal authorities decide against participating. Observers predicted the SEC would end up joining in the investigation, which Spitzer has been conducting for 10 months. Details of the investigation jolted Wall Street after Spitzer last week made public a series of Merrill Lynch e-mails he offered as evidence that analysts had grave doubts about stocks they were encouraging investors to buy. ``I think the SEC had to get aboard this ship. Otherwise, they would look like they are lagging behind the parade,'' said Columbia Law School professor John Coffee. ``They have been somewhat embarrassed by being behind everyone on the issue of accounting reform.'' If the SEC does not join the investigation, ``it would look like the business of securities enforcement had passed out of the SEC's hands and into the hands of other enforcers,'' Coffee said. Spitzer claims Merrill Lynch's Internet analysts gave overly optimistic stock ratings for the companies they cover so the firm's investment bankers would stand a better chance of receiving lucrative investment banking fees for arranging merger and stock underwriting deals for those same companies. Merrill Lynch has repeatedly denied the allegations, saying the e-mails were taken out of context. But in a conference call Wednesday to announce the company's first quarter earnings, Merrill Lynch chief financial officer Thomas Patrick acknowledged some of the e-mails were ``inappropriate'' and ``well below the standards'' expected of the company's analysts. Merrill Lynch lawyers are negotiating with Spitzer to settle the case, but Patrick said he could not predict the outcome. He also defended the company's analysts, while conceding that the firm has been hurt by the publicity. ``We are going to take whatever steps are necessary to counter the negative perception of our research product,'' Patrick said. Spitzer's terms for a settlement are for Merrill Lynch to admit it was wrong, change its the way it rates stocks and allow investors to recover money investors lost by following the firm's stock recommendations. The settlement could be used as model for deals with at least six other large Wall Street firms under investigation for similar alleged conflicts. Patrick said any changes resulting from the investigation should apply to all of its rivals. Merrill Lynch shares rose 5 cents in midday trading to $48.40 on the New York Stock Exchange. AP Business Writer Alan Clendenning contributed to this story from New York On the Net: Merrill Lynch: ml.com New York Attorney General's Office: oag.state.ny.us 04/17/02 13:33 EDT