Now that Lernout & Hauspie (LHSP:Nasdaq - news - boards) has filed for Chapter 11 , let's take a look at a few of the lessons of Lernout.

1. Be careful with any foreign company that only files the minimum required financials with the SEC (which is most of them), and then in the form of reports that are hopelessly out of date. It wasn't until Lernout filed 10-Qs and 10-Ks that the full magnitude of its troubles became clearly evident.

2. Be careful of any company based in a country like Belgium, where business ethics tend to be looser than they are in the U.S. (I hate to pick on Belgium but I've asked lots of folks in Belgium about Belgium, and the consensus is that it has its own set of rules!)

3. Be careful of any company that is the pride and joy of a fairly small country like Belgium; it can get a cult following that is blinded by patriotism. (If you only could see the emails I've received, in the middle of night, from investors whose attempt at threatening me in broken English/Flemish resembled something you'd see on Saturday Night Live.

4. Beware of companies that rely heavily on related-party or too-close-for-comfort transactions, no matter how well they're disclosed. In Lernout's case there was a wide web that, in the end, helped inflate revenue and reduce expenses.

5. Don't be fooled by companies that boast investments by well-known companies like Intel and Microsoft. (Both held big stakes in Lernout.)

6. Don't get fooled by a rapidly rising stock price. It doesn't necessarily reflect underlying fundamentals and sometimes means nothing more than ... the stock is rising! (Lernout's went from $20 to $72 in a flash, making its investors feel like geniuses.)

7. Don't be fooled by a supposedly hot new technology that is a better story than a business. (Speech-recognition technology is likely to be big one day, but in all likelihood it will be a low margin product that is given away.)

8. Be leery of companies that don't take calls from journalists (who, me?) that write critical stories. (What're they trying to hide?!?)

9. Be leery of companies run by a CEO that has a history of overpromising and underdelivering. (Lernout's ex-CEO Gaston Bastiaens left his former company, Quarterdeck, in similarly hobbled shape.)

10. Be leery of any company in which the analysts raise their target price while cutting earnings estimates. (Simply doesn't make sense unless they're trying to hype it to issue stock.)

11. Finally, don't take candy from strangers and be careful of any company that acquires a company whose sales are plummeting and tries to pretend they aren't. (That pretty much explains Lernout's acquisition of Dragon Systems, which was the beginning of its end.)