Did You Hear the One . . .

This is a column about a company that has everything it takes to be the next Microsoft. It’s one of those once-in-a-lifetime opportunities, and a successful business person like you would not want to miss out on the inside information we’re about to tell you.

You won’t learn this inside poop from our media competition, by the way, because they weren’t invited to an exclusive lunch that ended just minutes ago with the company’s CEO. But you’d better act fast, because this little idea will draw a stampede before you know it.

If you’re still reading, we’d urge that you make it your business to get through the rest of these thousand or so words. Because if you’d fall for a financial column that promises inside dope and can’t-lose investments, you’re the perfect target for the scripts being used at any number of boiler rooms around the nation. (“Boiler room” is the term for phone sales operations that try to make risky--or even fraudulent--small-stock deals.)

Securities regulators confiscate copies of sales scripts when they raid the places where they suspect penny stocks are fraudulently being hawked, and a recent roundup yielded some classics of the scripted-pitch genre. A sales script isn’t of itself illegal, but its content and the way it is used must comply with securities laws.

In exhibits to complaints filed by state regulators in late May, regulators laid out the ploys cold callers use to try to persuade the gullible.

Among other things, the scripts take great care to assure the pigeons on the other end that they’re dealing with a high-class professional.

“Our top analysts, investment bankers, economists, technical and portfolio strategists have put together a collaborative treatment of ------,” reads one script regulators seized.

“I understand you haven’t heard of Lew Lieberbaum,” reads another. “The reason is very simple. We choose not to advertise. We’re not a Merryl [sic] Lynch or Shearson Lehman house that has to advertise because they don’t make their clients money.”

Lest the investor still feel queasy dealing with a firm he or she hasn’t heard of, the above script--which is not recommended reading for picky English teachers--adds that “you’ll receive a standard confirmation from our bank clearing agent Bear Stearns of who the federal government does their banking with.”

Regulators from the New York state attorney general’s office picked up the Lieberbaum script not at the brokerage firm Lew Lieberbaum & Co., but at First United Equities, a New York firm named in a May 27 preliminary injunction, accused of deceptive and fraudulent sales practices.

“These young brokers with a few years’ experience have already bounced through many firms,” says Andrew Kandel, bureau chief for investor protection at the attorney general’s office. “They acquire the firms’ scripts and take their favorites with them when they leave.”

At First United, regulators came across scripts that included the names of Duke & Co., Gaines Berland, Lehman Bros. and D.H. Blair: a loose-leaf binder “filled with more than 100 scripts,” the memo from the attorney general said.

Marvin Gersten, a lawyer for First United, said the firm does not allow brokers to use scripts and that the broker who owned the binder had been fired before New York took action against the firm.

Gersten told Newsday last month that First United had not received an unusual number of customer complaints and that it had called him several months before to help clear up minor operational problems.

“We didn’t find an incompliant broker-dealer who was running a bucket shop” or illegal stock-trading operation, he told the Long Island-based newspaper.

Whoever may have used them, the scripts cover every possible turn in the prospecting conversation.

To the investor who wants a research report: “When Columbus discovered America, he didn’t send a report until he actually saw the land. At that point it was history,” one script says.

To the man who says he has to talk to his wife: “Let’s be candid--you don’t confer with your wife on your day-to-day business decisions.”

And to the prospect who says it’s not the right time or that he’s not in the right mood for buying stocks: “If I had a 6-foot blond today, would you be in the right mood?”

Some scripts direct brokers to compliment their prospects, building them up as savvy businessmen (they target men, avoid women, who tend to be more skeptical) who can make big-bucks decisions. “I have a lot of important people like yourself to contact,” one script says.

Others, though, direct brokers to be outraged with the client who may be resisting. “I can’t believe what’s going on here!!” reads one script. “Morgan Bank treats me nicer than you. Do you realize who consults with us? Ted Turner talks to me nicer than you do.”

It never hurts to let the prospects think they’re in on a big secret: “(Whisper) Mario Gabelli has just taken a 4.9% stake,” reads one script, in which the name “Duke & Co.” was replaced with “FUE,” the initials for First United Equities.

Throughout the package of scripts, examples abound of promises of future stock prices that wound up unmet, and claims of past price performance that are whimsical at best.

One script had the broker boast that the initial public offering of Sonic Environmental Systems made winners of investors when the stock soared to $22.75. But that price was enjoyed for only 10 trading days before it plunged to less than $3. (It now trades below $1.) The company was delisted from the Nasdaq SmallCap market in April 1996.

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Investors will give all sorts of excuses for not wanting to buy, and scripts give brokers a way to respond.

The investor who says he isn’t ready for a second stock is asked, “Mr. ------, a question: Did you marry the first girl you ever kissed?”

The investor who doesn’t want to buy because the first stock he bought has been a loser gets this: “The easiest thing for me to do is not call you--which is what 99% of the people in my business would do. In fact, I knew I would need an aspirin after this call. But I also knew you’d expect me to be there for you.”

With that, the broker pitches a new idea: “You are going to think I’m a magician because I’m going to turn a losing situation into a winning situation, right before your eyes.”

You can’t expect the compliance department “to be sitting on top of the broker,” watching to see if he uses scripts, says Tom Rensvold, who works in the compliance department of Duke & Co.

And you apparently can’t account for all manner of mysterious use of a brokerage firm’s name on other people’s scripts. “We don’t have any idea what those scripts are,” says Steve Anreder, spokesman for D.H. Blair. “We won’t even speculate how someone developed a script using the firm’s name.”

And neither will we.