Sunrise's Tell-All Past

Short-sellers, like expert poker players, look for "tells," little signals about a company's past that increase their conviction that a company's in for a fall.

In the case of Sunrise Technologies (SNRS Quote), which is coming up for Food and Drug Administration panel review of its farsightedness laser, the tells are virtually screaming.

The company's pedigree is lousy. It was brought public by Thomas James Associates in 1989. In 1990, in order to settle a suit by the Securities and Exchange Commission, a federal judge ordered Thomas James, its former president and a director, to pay $1.5 million for "fraudulent and high-pressure sales tactics" in conjunction with four initial public offerings, including Sunrise. The firm is now defunct. That's a tell: Few good companies get taken public by bad underwriters. ...