Conference nyoss1::market_investing

    There are other notes in here on them--they're basically an aggressive
    sales organization that happens to sell stocks rather than aluminum
    siding, time-share condos or whatever.
    
    Ask yourself what you would do if you knew of a stock which would
    double or triple in the near future.  I know what I'd do: I'd buy
    some and keep quiet about it!  So why are they telling you? 
    
    It's a good rule to _never_ do any business deals with someone who
    calls you cold (they initiate the contact, not you).  You may miss some
    winners, but you'll avoid a lot of losses.
    
    		-John Bishop

	Re. .0

	To paraphrase George Bush: "Mr. and Mrs. America, watch your wallet"
	when you hear from Hibbard Brown. :-)

    	re: .0
    
    	Agreement from this end also...I gave in to them 4 years ago
    	and bought some stock on one of their great hunches that
    	turned into bunches of nothing...
    
    	Beware,
    	Robert

    
    
    Thanks for your replies. The image I got by dealing with Hibbard Brown
    and Company certainly agress with what has been the experience of
    others in these replies. The way I was contacted was a Cold Call. The guy 
    just asked if I would be interested in any investment and how much I would
    be willing to invest. Ofcourse he did not tell me that the first time 
    that there is this company (Treats Intl) whom he is trying to push. It
    was his second call in which he said that after a lot of "research"
    Hibbard Brown is recommending Treats Intl. I am sure the reason he
    called me in first place was because he wanted to push for this stock.
    They probably have a deal with Treats Intl on raising certain amount of
    capital for them. 
    
    Thanks for your replies. It helps put my experience in perspective and
    not make me recommend Hibbard Brown to anybody in future.
    
      
    
    Paritosh
    

    Read FOrbes (either it is the current issue or the prev one). The cover
    article is about the guy that has run dubious joints like HB & 1st Jersy 
    (or is 1st State).makes worthwhile reading, if you plan to invest with
    HB.

	I got a message left on my machine today from HB. I guess it was 
	only a matter of time. Wish I had number ID...
	
	Bob

   There is an article in todays Boston Globe there is an article in Hibbard
Brown and an investigation which has been underway in Massachusetts. They can
still operate in the state until a hearing has been held. Secretary of State
Micheal Connolly has filed a civil complaint against the company.


	/Ken

Here is a Clarinet UPI article on Hibbard Brown. Note that our contract with
Clarinet does not allow you to forward this article outside of Digital.

Interestingly, I got a message that someone from Hibbard Brown had called me at
my office only yesteday.

Dan

From: [email protected] (UPI)
Newsgroups: clari.biz.finance.services,clari.biz.courts,clari.biz.misc
Subject: Mass. officials charge Hibbard Brown with 'fraud and abuse'
Keywords: brokerages, financial services, fraud, court proceedings,
        corporate ethics, corporate finance
Message-ID: <[email protected]>
Date: 8 Jan 93 01:28:36 GMT
Lines: 63
Approved: [email protected]


        BOSTON (UPI) -- State securities officials filed a complaint Thursday
against a national brokerage firm alleging it lured 2,600 Massachusetts
consumers into buying $8 million in penny stocks at inflated prices.
        Secretary of State Michael Connolly unveiled a 97-page complaint
against Hibbard Brown & Co. Inc., a New York City-based firm with a
branch office in Wakefield that Connolly said exhibited an
``unmistakable pattern of fraud and abuse'' that was ``deliberate and
calculated.''
        The complaint, which seeks to revoke the firm's brokerage license,
will be heard by Connolly's Securities Division Director Barry Guthary,
who Connolly said was not involved in the investigation.
        Asked why he chose not to press criminal charges, Connolly declined
comment, saying only, ``This is civil in nature. There's more to come.''
        The company has surrendered its Delaware license voluntarily in
connection with an investigation of its operations in that state,
Connolly said.
        He alleged that up to 20 Hibbard Brown brokerage agents working out
of the Wakefield office violated state securities fraud laws ``through a
systemic program of misleading, high-pressure sales pitches for
securities from sometimes dubious enterprises.''
        Connolly said he expects other states, and perhaps the federal
Securities Exchange Commission, to begin investigations against Hibbard
Brown.
        If that occurs, the case could potentially be bigger than the Solomon
Brothers bond trading scandal, which has resulted in about $300 million
in investor settlements, he said.
        ``This story today is even bigger and even more significant'' than
the Solomon Brothers case, said Connolly.
        Connolly said he hopes the ``lion's share'' of the $8 million in
investments will be returned to Massachusetts investors. He said many of
the investors bought stocks at $4 per share after Hibbard Brown and Co.
purchased them for 10 cents or less, Connolly said.
        Boston attorney Michael Unger, representing the firm, refused to
comment specifically on the charges, but said that Connolly's office is
``intent on driving the firm out of state.''
        Unger acknowledged the company has been under investigation by
Connolly's office for more than three years, but said the company took
internal steps to ``rein in'' brokers who were ``acting too
aggressively.''
        Unger, who was at the news conference, said Hibbard Brown has
submitted thousands of documents to Connolly's office. But Connolly,
standing a few feet away from Unger, accused the firm of destroying
documents and called Unger's claim of cooperation ``disingenuous.''
        Unger said Hibbard Brown will continue operating until it is afforded
a hearing, a process that he said will ``take a very long time.''
        Connolly said the sales practices questioned in the complaint include
a game in which agents were issued playing cards for increasing their
sales. At the end of a working day, the agent holding the best poker
hand would win a prize or cash, Connolly said.
        In addition, he alleged that Hibbard Brown agents lured unsuspecting
elderly investors using the ``sizzle'' scheme whereby agents would place
repeated friendly calls to prospective investors to gain their trust.
        And Connolly added that the company sometimes even removed the chairs
of agents, hoping that by forcing them to stand, it would increase their
sales productivity.
        The complaint alleges that company agents sold unregistered stocks
and persuaded over 1,000 people to invest in CCC Franchising Corp.,
without telling investors that the company had no revenues or employees.
        The complaint also seeks to revoke the licenses of Hibbard Brown
President Richard Brown; vice president of national sales Michael Hart;
compliance director DeJuan Stroud; and Massachusetts branch managers
Michael Ronan and Richard West.

  Are there any readers of this conference who have tried to contact the Mass.
State Securities Office about this? I began trying two weeks ago and so far all
I have succeeded in doing is playing telephone tag. It appears that the office
is hopelessly bogged down due to understaffing. It doesn't give me a sense of
security as far as other brokerages being prevented from pulling similar
tricks in MA.
  I got the impression from the article that some investors may get some of
their money back as a result of a state suit instead of via a class action.
(There may be a class action in progress too.) This is promising because in
a class action, most of the money goes to the lawyers and the investors are
lucky to get 10 cents for every dollar lost. I think that if the state acts
on behalf of investors, a higher percentage of the award will go to investors.

  I recently re-read the UPI article and have some questions about the
"inflated stock prices". How can a brokerage inflate stock prices like this?
Is it standard practice for brokerages to mark up stock prices slightly? If
so, what kind of markup is OK? I assume the >1000% markup mentioned in the
UPI article constitutes fraud.
  Would the discrepancy between the actual stock price and Hibbard's price show
up in the stock quotes in the newspaper? Some of the stocks Hibbard sold are
unlisted; are these the stocks that HB inflated?
  Hindsight is 20/20. I should have checked these stock prices independently
and not assumed that HB was charging the right price. I don't know if any of
the HB stocks I bought were subject to these high markups.

  After a 3-month delay, I got a letter from the Mass. Securities Div. ans-
wering some of my questions. This is what they said:

1. The Division can't notify investors of any class action which may be in
progress on this case. This means I and others will have to wait for the
court or lawyers handling the case to notify us. Also, the state legally can't
turn over any information compiled in the investigation to the plantiffs in a
class action, because this information is confidential. (Of course, any infor-
mation presented in court is not confidential, but the state's case may be
settled out of court.)

2. The $8 million figure cited in the UPI article is an estimate of HB's
gross proceeds from the sale of four overpriced stocks by the Boston office
during a specific time period. These stocks are Site-Based Media, CCC Franchis-
ing, Trans-Atlantic Video, and PDK labs.

  Because investors probably lost most of the money they invested in these 
stocks, they are likely to get back a high percentage of their losses IN THESE 
STOCKS. However, these stocks are only a small percentage of the stocks sold
by HB on which people lost money. It appears that the criterion for this 
action is not if investory lost large sums of money, but if certain narrowly
defined forms of fraud occurred.
  They didn't answer my question on how brokerages can mark up stocks by such
huge amounts without it being detected by investors, but I think the answer is
that none of the above stocks were listed and therefore investors could not get
an independent quote on the price. (By "listed" I mean shown in the financial
pages of at least one paper.)
  I don't have a lot of confidence in the ability of the Mass. Securities Div.
to protect investors from outfits like HB. This action is proceeding slowly and
is limited in scope. I think rule #1 for investors is CAVEAT EMPTOR.

    As an aside, I just got a hand-addressed letter from HB asking if I'd
    like a job with them as a stockbroker -- even offered to pay for my
    training.  The letter specifically talks about the amount of $ one can
    make at a broker for them...
    

    Recent letters from HB indicated that their Mass license has been
    revoked. On a lark, I called the 800 number listed in the letter and
    asked if they would refund money I invested in some of these worthless
    stocks. I was told to send them a letter with information on my
    purchases and they would consider it! Has anyone already done this? I
    think I'll talk with the SEC before sending them anything to find out
    if there are any other options. They did ask if I had already contacted
    the SEC, so I suspect I should touch base with them and see what they
    have to say.
    
    Ray