1. Not a Shred of Evidence of Any Wrongdoing

I don't know about you, but the last time I talked to my accountant, he told me to hold on to my tax records for at least three years.

I guess he runs in different circles than the good folks over at Andersen, the outside auditors for the reverse-Midas marvel known as




As if things couldn't get any worse for Andersen, which faces a few years' worth of investigation, litigation and perhaps even prosecution for its role in the Enron debacle, the company disclosed Thursday that in recent months, Andersen employees involved with work for Enron disposed of "a significant but undetermined number of electronic and paper documents and correspondence relating to the Enron engagement." (Andersen doesn't say why that material got trashed, but until things get sorted out, the company issued a directive forbidding employees to throw out anything more substantive than Kleenex tissue.)

News of the Enron housecleaning "is a deeply troubling development," said House Energy and Commerce Committee chairman Billy Tauzin (R-La.). "Anyone who destroyed records simply out of stupidity should be fired; anyone who destroyed records intentionally to subvert our investigation should be prosecuted."

Of course the real question is how anyone involved with the Enron audit in recent months -- an audit that no doubt produced a paper trail longer than Interstate 80 -- might have been casually able to shred a significant number of paper documents and correspondence.

Picture the scene: "Hey, Bob, you've been feeding documents into that shredder there for, oh, 17 days now. What's up?"

"Not much, Fred. Just clearing out my attic and getting rid of 400 pounds of credit card receipts on company time. What's up with you?"

2. Board Silly

We work hard at avoiding meaningful discoveries here at the lab. But sometimes we just blunder into them.

Start with

Peregrine Systems


, the software company we chided last week for issuing an earnings warning at the investor-unfriendly hour of 11:26 p.m. EST.

That near-midnight warning looked an awful lot like the financial-market misdirection equivalent of The Wizard of Oz: Pay no attention to the man behind the curtain. Or to any financial news released when even the most die-hard


addicts are glued to Cheers reruns. A Peregrine spokeswoman denied there was anything noteworthy about the timing.

Well, we would have taken Peregrine at its word and flown on, except for the mail we got from three loyal readers after we published that item. They said there was something decidedly odd about the events leading up to that preannouncement. And though a key piece of evidence has disappeared from the figurative storage locker, they make a compelling argument that someone's got some 'splaining to do.

Here's the outline of the story, according to the conspiracy theorists. Around 5:50 p.m. EST Jan. 2 -- six hours before the preannouncement went out on the wires -- someone using the name paragreen69 posted some juicy information on the Peregrine message board: essentially, that the company was going to fall short of analysts' expectations for the third fiscal quarter ended Dec. 31.

The posting had the aura of verisimilitude, of something that could be written only by a company insider -- or by an imaginative short-seller posing as one. The message, which three different readers claim to have seen, supposedly quoted Peregrine Chairman and CEO Steve Gardner. It "was quite detailed and maybe 30 lines long," wrote one


correspondent. "Not a rant, but numbers and explanations."

We'd like to read it for ourselves, but no luck: The posting at issue, No. 25715 on


Peregrine board, has been pulled. Neither Yahoo! nor anyone from Peregrine will talk about what was in the message, where it came from or where it went. Yet something really was there; in the six hours between paragreen69's comments and the company's confession, some people reacted with an intrigued "Wow! Where did this come from?"; others denounced the poster as an obvious fake with either a vendetta against the company or a short position. In other words, witnesses behaved exactly the way you'd expect them to if they read a plausible-looking warning of a company's imminent stumble.

OK, the evidence is flimsy. And we're still not exactly sure what was in the posting at issue. But we've got two alternatives for what happened: One, someone with inside information spilled Peregrine's beans. Or two, an angry writer of fiction got lucky.

Either way, paragreen69 sounds like a promising financial news reporter. Whoever you are, mind shooting us your resume?

3. Scores' Big Shaft

Marv, the Lab's chairman emeritus, is a lovable, crusty old sort who smokes cigars, drinks a three-martini breakfast, and kicks small dogs. In addition to the devotion he has won by picking up our lunch tabs, Marv never fails to impress us with his hard-earned investment wisdom -- nuggets of knowledge, dispensed in pithy pronouncements, designed to prevent the neophyte from getting fleeced on the Street.

Some priceless rules of thumb from the master: Never trust a chief financial officer who has a beard. Be suspicious of all high-tech firms based on the east coast of Florida. Sex is fine for hobbyists, but not for publicly traded companies. And limit your theme restaurant investments to a burger with fries.

Boy, do we have a stock for Marv.

TST Recommends

On Wednesday, the pink-sheets-traded

Internet Advisory Corp.

, which formerly operated as an Internet service provider in Fort Lauderdale, Fla., announced it was planning to buy the Manhattan strip club Scores. The company hopes to go national. "We are going to focus on building shareholder value through leveraging Scores' brand equity through the acquisition of complementary properties in major American markets," says Internet Advisory's CEO. "Scores has established a reputation for providing a quality-assured environment that we feel will expand well into the markets we have targeted." There's lots of money to be made from food, alcohol and cover charges.

Awesome. A technology company on the east coast of Florida getting into the business of sex-oriented theme restaurants.

We haven't seen any photos of Internet Advisory's CFO. But we wouldn't be surprised if he didn't own a razor.

4. Overdrawn at the Favor Bank

What with all the analysts on Wall Street listening to the same conference calls, going to the investor meetings and visiting the same gentleman's clubs in Manhattan, the individual investor is likely to be a little suspicious of this old-boy network. You know, you scratch my back, I'll scratch yours.

Well you can rest easy, at least for this week. Case in point: recent behavior of Mike Mayo, banking analyst at

Prudential Financial's

(PRU) - Get Report

Prudential Securities unit.

On Monday, more than a half-dozen analysts from the nation's biggest brokerages initiated coverage on the recently demutualized Prudential Financial, awarding the company a consensus rating of buy.

So what did Mayo do for his buddies in return? He ignored them, and worse. On Monday he upgraded




Bank of New York

(BK) - Get Report

, two companies that didn't initiate coverage on him. On top of that, Mayo downgraded

Bank of America

(BAC) - Get Report

, one of Prudential's fans and underwriters.

Yep. Sort of like, You scratch my back, and I'll rip the flesh off your bones.

5. It's No Crime to Be Stupid, but Maybe It Should Be

I guess we're supposed to feel sympathetic. The

Securities and Exchange Commission

said Monday that one Cole A. Bartiromo, age 17, had been identified as the mastermind of a securities fraud that duped 1,000 investors out of an average of $1,000 apiece.

But how did he cheat all these widows and orphans? By offering a reasonable-sounding investment, one that balanced risk and reward?

Not exactly. Bartiromo effectively erected a sign on a Web site that said, "Danger Ahead! Do Not Invest Here!" More specifically, he said he'd make money by placing "safe bets" with online sportsbooks. And he offered returns ranging from 125% in three days to 2,500% in as few as 11 days.

Sure. Sounds reasonable to us.

We haven't read Bartiromo's settlement agreement, but we're sure it includes something about not being allowed to participate in the securities industry for a long, long time.

Fair enough. But what about all those people who sent Bartiromo $1,000 apiece? Shouldn't they be barred from online investing for life?

Note to legislators who think it's a good idea for all Americans to invest their Social Security kitty in the marketplace: Why not just avoid all the paperwork and issue them lottery tickets instead?