Anchors for hire: Donald Baillargeon (left) and Skip Lindeman.

DONALD BAILLARGEON ISN'T

a financial news anchor, but he plays one on cable television systems across the country.

The former advertising and marketing executive is the star, founder and executive producer of a television program called "Emerging Company Report," which appears weekends on cable systems in more than 125 cities. The 30-minute show, now in its fourth year, focuses exclusively on small publicly traded companies that Baillargeon likes to say could be "the stars of tomorrow."

But don't let the show's anchor desk, nifty theme music and on-camera interviews with corporate executives fool you "Emerging Company Report" is a far cry from the business news programs that regularly air on CNBC and CNNfn. In fact, the show's not much different from the infomercials for products like Suzanne Sommers' Torso Track abdominal machine that usually precede or follow it on local cable systems. The corporate executives interviewed on "Emerging Company Report" pay $10,950 for the privilege of having Baillargeon and his co-host Skip Lindeman lob big, juicy softball questions at them and promote their companies.

You'd have a hard time discovering that bit about the fees, however, from watching an "Emerging Company Report" broadcast. The only indication that the corporate executives have forked out dough comes in a 130-word disclaimer that flashes on the TV screen for about 8 seconds at the start of each broadcast. And since the disclaimer appears before the logo is flashed and the theme music kicks in, it's possible that viewers tuning in late might think they're actually watching a real business news show and not an advertisement for a bunch of over-the-counter Bulletin Board stocks.

"These infomercials are really little more than advertisements made to appear like news programs," says Bradley Skolnik, Indiana securities commissioner and president of the North American Securities Administrators Association, a professional association of state securities regulators. They're difficult to regulate, he says, because "many in the regulatory community aren't even aware when these shows are on."

There's nothing illegal or inherently unethical about television programs like "Emerging Company Report." So-called pay-for-hire stock broadcasts have been around for years first on radio, then TV and now the Internet. Executives at small businesses say they need these kinds of programs in order to get their stories out to the investing public. The Securities and Exchange Commission, meanwhile, says stock-promotion programs are permissible as long as the broadcasts disclose that companies are paying a fee either in cash or stock for a favorable mention. The SEC won't comment on "Emerging Company Report's" broadcasts, but it appears that Baillargeon is doing just enough to satisfy the disclosure requirement.

But a pay-for-hire broadcast that meets the letter of the law can still create confusion in the minds of some investors particularly with the explosion of financial news on TV and the Web. "If a disclosure is going to mean anything, it's important the disclaimer is posted in a manner that can be understood by the average viewer," says Skolnik. John Markese, president of the American Association of Individual Investors, a consumer protection group, takes a more direct stand. He advises investors to ignore shows like "Emerging Company Report" entirely, since the information they provide is completely one-sided and goes unchallenged.

With millions of online investors now buying and selling stocks on their own, regulators say, individuals need to be especially vigilant in choosing their financial news sources. That's especially true when it comes to highly speculative Bulletin Board stocks, a popular playground for stock scammers. Just this week, for example, federal authorities in New York charged 120 people, including brokers and individuals with ties to two of New York's organized-crime families, of running a massive stock-manipulation scheme involving nearly a dozen small-cap stocks.

Two years ago, the SEC began an aggressive crackdown on pay-for-hire stock promotion newsletters, broadcasts and Web sites that failed to disclose that they took money to tout a stock. One of the companies caught up in the sweep was Baillargeon's "Emerging Company Report," which broadcasts from a Hollywood, Calif. studio. The SEC cited Baillargeon, as well as the program, for not disclosing the exact dollar amount of the fees he was taking from companies that had been featured on the show an omission Baillargeon has since rectified at the SEC's request.

But the SEC isn't finished with Baillargeon just yet. In an unrelated matter, regulators have charged him with being a participant in a multimillion-dollar stock-manipulation scheme involving a now-defunct Bulletin Board company called Alliance Industries. Baillargeon had been vice president of public relations and marketing for the California firm when the SEC suspended trading in its stock in 1996. Last summer the commission filed civil fraud charges against Baillargeon and former Chief Executive Peter Norman, who allegedly controlled 80% of the company's stock. The SEC contends the two men made false and misleading statements in an attempt to bolster the company's stock price. Some of the misleading statements, the SEC charges, included claims about several new business ventures the company intended to move into including the breeding of goats and the development of a chain of chiropractic clinics. The SEC complaint says the two men claimed the new businesses would boost Alliance's revenues from $20 million in 1997 to $1.2 billion in 2006. That's a lot of goats.

Baillargeon insists Norman duped him, and says he had no knowledge of the alleged stock manipulation and relied on financial projections that had been verified by an accountant. He contends he'll be vindicated when the case comes to trial. "Nobody lost more in that deal than me," says Baillargeon, who was in New York Thursday to film this weekend's edition of "Emerging Company Report." "Going to work for that company was a huge error on my part." Norman couldn't be reached for comment.

So far, however, the pending litigation doesn't seem to have had much impact on "Emerging Company Report" or Baillargeon's television career. In September, the company will air its 200th original show, a rare feat in the television business. Clearly, there seems to be a market for this kind of material.

Robert Ziner, chief executive officer of Value Holdings, a Miami-based lumber-distribution business with $70 million in sales, has only positive things to say about the program. He's appeared on the show three times in recent weeks, and those appearances have prompted more than 700 requests from viewers for more information. "It's all about public relations and investor information," says Ziner. But if Ziner was looking for a bounce in his stock, forget it. Since his appearance on the June 2-4 edition of "Emerging Company Report," Value's stock on the Bulletin Board has never risen above 40 cents, although daily trading volume rose from about 800,000 shares to 2 million shares on June 15.

But results aren't especially important to Baillargeon he says he has no vested interest in the performance of stocks profiled on his program because he's paid in cash. All he's trying to do, he says, is provide a forum for small businesses to communicate directly to investors. "I think we go out of our way to say that it is only an information source," says Baillargeon. "I would hope that people wouldn't make investment decisions based solely on what they see on a television program."

That's certainly good advice, because one of the companies featured on an "Emerging Company Report" broadcast in early March, Enterprises Solutions, became ensnarled in a legal battle with the SEC shortly after one of its executives appeared on the program. The SEC suspended trading in the Massachusetts-based company's stock in March and later filed civil fraud charges against the tiny Internet security firm. The SEC contends the company repeatedly made misleading statements about several security products it was developing as part of a multimillion-dollar stock-manipulation scheme. Baillargeon says situations like the one involving Enterprises Solutions are rare, and points out that, while he tries to make sure all the companies featured on the show are viable concerns, he isn't a financial analyst.

In other words, making an investment decision based on something you see on a show like "Emerging Company Report" is not much better than buying a stock based on a company's press release. Just as you generally don't find bad news in a corporate press release and when it is there, it's usually sugar-coated an "Emerging Company Report" broadcast is the epitome of positive spin control.

Programs like "Emerging Company Report" give a whole new meaning to the derisive phrase "happy talk," which some in the news business use to describe the inane banter between anchors on local television newscasts. But this kind of happy talk could end up costing people money.