Fifteen months ago, Red Herring columnist Christopher Byron advised readers to avoid the stock of GenesisIntermedia (Nasdaq: GENI), a company involved in a bizarre collection of businesses that included car rentals, telemarketing, and Web kiosks. There were also apparent ties to drug dealers (see "The Contrarian," November 2001). Those who followed his advice would have saved at least the cost of an eight ball.

His recommendation was based less on the company's financial prospects (although they were dubious) than on an uncomfortable feeling brought on by the cast of shady characters that seemed to be floating in its orbit. The lineup included Adnan Khashoggi (a fugitive arms dealer), two convicted drug dealers (one dead), a Colombian cocaine hit squad, and others with ties to the Iran-Contra scandal.

Amazingly, a recent lawsuit suggests that he hadn't even uncovered all the malefactors. The case, which was filed last fall on behalf of MJK Clearing, a subsidiary of Minnesota brokerage StockWalk Group, points a finger directly at the Toronto branch of Deutsche Bank and a recently fired broker named Wayne Breedon. Other colorful defendants: Mr. Khashoggi; Ramy El-Batrawi, the former CEO of GenesisIntermedia; Bradford Keiller, the owner of a Las Vegas strip club; and ten people referred to as "John Does 1-10."

According to the suit, Mr. Breedon and his co-conspirators engaged in fraudulent stock loans using Genesis shares, bringing down StockWalk in the process. The firm's collapse last year was the largest of a brokerage in 30 years.