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AAC: This came out 30 minutes ago...

Can't find it on any other wire service but came across Alphatrade streamer:

Ableauctions.com Gets 'Speculative Buy' Rating But At What Price?

Apr 1, 2004 (financialwire.net via COMTEX) --
(FinancialWire) HPC Capital Management has reported that it has initiated fee-based equity research coverage of Ableauctions.com, Inc. (AMEX: ASC) with a "Speculative Buy" recommendation and an increased target price of $1.79, up over the $0.84 per share when initiated a month ago, but failed to disclose the amount of compensation as required in its press release.

HPC provides similar coverage on Somanetics Corp. (NASDAQ: SMTS), RCG Companies Inc. (AMEX: RCG) and Deckers Outdoor (NASDAQ: DECK).

In the actual report, HPC disclosed that an unnamede affiliate had purchased 7,015,385 shares of Ableauctions.com in private placements, and that as an investment banker, HPC had been paid a retainer of $5,000 and issued 100,000 warrants. It didn't say when and how the warrants could be exercised.

Disclosure in all public communications is required by the U.S. Securities and Exchange Commission Regulation 17(b).

Dutton separately issued its own press release which disclosed that the company had paid it $28,000 for coverage for the year.

The U.S. Securities and Exchange Commission Regulation 17(b) states:

"It shall be unlawful for any person, by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails, to publish, give publicity to, or circulate any notice, circular, advertisement, newspaper, article, letter, investment service, or communication which, though not purporting to offer a security for sale, describes such security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof."

The SEC has told FinancialWire that this regulation means full and complete compensation for research and any other services provided, including amounts and sources, must be disclosed in "every press release" as well as other published documents. The SEC states that third party compensations must include the relationship of the payer to the issuer.

In an email to FinancialWire as recently as January 5, 2004, John J. Nester, a spokesperson for the U.S. Securities and Exchange Commission confirmed that regulators interpret 17(b) to mean that specific compensation information must be contained in press releases, and that a link to a disclosure somewhere else, for example, is a violation of rhe regulation. He further stated that the compensation disclosure required by the SEC includes "amounts and sources in any press release mentioning the company under research coverage."

The SEC had previously told FinancialWire that it intends to enforce these provisions so that investors may have a fully transparent understanding of any potential agenda or lack thereof.

Many of the practices of such "research" companies run counter to the new research guidelines being jointly promulgated by the Association for Investment Managent and Research and the National Investor Relations Institute.

The AIMR-NIRI proposed standards note that analysts receiving fees from a corporate issuer must accept only cash compensation, and "no compensation contingent on the content or conclusions of the research or the resulting impact on share price," and must disclose the nature and extent of the compensation, any personal, professional or financial relationship or their firm may have with the company, if any, their professional credentials, and any matters which could "reasonably be expected to impair their objectivity in drafting the report.

The two organizations propose that such coverage must be paid for in cash, and "only in a manner that does not influence or seek to influence the content and conclusions of the research, not attempt explicitly or implicitly to influence the research, recommendations, or behavior of analysts or otherwise pressure analysts to produce research or recommendations favorable to the corporate issue, and ensure that the disclosures required of the analyst . are included in the research report, that are published or distributed, in whole or in part, by the corporate issuer."

The document states that payment in "stock warrants or other equity instruments that could increase in value based on positive coverage in the report" means "analysts would have incentive to avoid negative information or conclusions that would diminish their compensation."

Finally, the two organizations require that public companies themselves "engage qualified analysts."

Many websites and press releases purporting to provide equity research provide little or not credentials or qualifications of analysts, and some do not even name the analyst involved in a specific report.

A "Standards for Independent Research Providers" at http://www.firstresearchconsortium.com lists a number of firms that not only adhere to the SEC regulations, but also the guidelines proposed by AIMR-NIRI, and go further, including a prohibition on analysts or research firms owning or trading stocks under coverage due to the inherent conflict.

The Standards for Independent Research Providers, which may be adopted without fee by any qualifying independent research provider, also prohibit the provision of public relations, investor relations or investor relations services by a research provider or its affiliates.

While independent research by standards-based providers are growing in legitimacy, according to the Dow Jones (NYSE: DJ) in a recent article, the article quoted Lou Thompson, president of the National Investor Relations Institute, which had issued new Guidelines on 2002 endorsing legitimate "paid-for" research, as warning of " various mutations of paid-for research."

"Given that (Wall Street) can no longer pay for research through investment banking, we're probably going to see a significant reduction in the number of companies that have any analyst coverage. So then companies are left wondering, 'How am I going to get institutional investors to let me in the door without any coverage?'"

The FIRST Research Consortium is the first organization to promulgate standards acceptable to the industry and meant to provide fairness and transparency to the investing public.

Companies in the FinancialWire questionable research series have included Horizon Medical (AMEX: HMP), Nymox (NASDAQ: NYMX), Genesis Technology Group (OTCBB: GTEC), Martek Biosciences (NASDAQ: MATK), Ecolab (NYSE: ECL), Clorox (NYSE: CLX), Dial Corp. (NYSE: DL), AdZone (OTCBB: ADZR), American Water Star (OTCBB: AMWS), Markland Technologies (OTCBB: MRKL), Transnational Financial Network (AMEX: TFN) and International Barrier Technology (OTCBB: IBTGF; TSX Venture: IBH), Telkonet (OTCBB: TLKO), Cytomedix (OTCBB: CYME), LocatePlus (OTCBB: LPLHA), Rockport Healthcare (OTCBB: RPHL), Universal Express Co. (OTCBB: USXP), Lifestream Technologies (OTCBB: LFTC), CareDecision Corp. (OTCBB: CDED), Life Energy and Technology Holdings, Inc. (OTCBB: LETH), and Flight Safety (OTCBB: FSFY);

Also, Playtex Products (NYSE: PYX), Ericware Technologies (OTC: ECWR), NuTech Digital, Inc. (OTCBB: NTDL), Terra Nostra Technology Ltd. (OTCBB: TNRL), and NanoSignal Corp. (OTCBB: NNOS)., DNAPrintGenomics (OTCBB: DNAP), Syndication Net.com (OTCBB: SYCI), Quintek Technologies (OTCBB: QTEK), GeneLink (OTCBB: GLNK), Quality of Life Health Corp. (OTC: QLHC), Environmental Remediation Holding Corp. (OTCBB: ERHC), Cornerstone Entertainment (OTC: CNRH), Medifast, Inc. (AMEX: MED), Workstream, Inc. (NASDAQ: WSTM), SIGA Technologies (NASDAQ: SIGA), Sub Surface Waste Management of Delaware (OTCBB: SSWM), a21, Inc. (OTCBB: ATWO); and

Also, OrderPro Logistics (OTCBB: OPLO), Military Resale Group, Inc. (OTCBB: MYRG), Timber Resources International, Inc. (OTC: TMBN), OptimumCare Corporation (OTCBB: OPMC), Command Security (OTCBB: CMMD), Molecular Imaging Corporation (OTCBB: MLRI), TechnoConcepts Inc. (OTCBB: TCPT), Sequiam Corporation (OTCBB: SQUM), Provectus Pharmaceuticals, Inc. (OTCBB: PVCT), eFoodSafety.com (OTCBB: EFSF), Intelligent Business Systems Group International, Inc (OTCBB: IGII), Chilmark Entertainment (OTC: CMKK), Tech Laboratories, Inc. (OTCBB: TCHL), BodyScan Corp. (OTC: BDYS), Wireless Frontier Internet, Inc. (OTCBB: WFRI), Ableauctions.com, Inc. (AMEX: ASC), UFP Technologies (NASDAQ: USPT), Systems Evolution Inc. (OTCBB: SEVI), Axonyx Inc. (NASDAQ: AXYX), and Epixtar Corp. (OTCBB: EPXR).

The full stories regarding each may be found via the FinancialWire PowerSearch facility at http://www.investrend.com/PowerSearch/?s=Advanced+Search .

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