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For years, the securities industry in the U.S. and elsewhere has been host to fast-buck brokerage firms that have ridden the back of the bull market like so many parasites. Typically, they hype penny stocks in tiny companies that are all promise and no delivery and then close up shop when the market hiccups or the regulators catch on, leaving gullible investors to count their losses.

No one has been a better practitioner of the craft than Irving Kott, a sharp operator who has played a powerful, behind-the-scenes role at brokerage firms in his native Canada, Continental Europe, Britain and the U.S. In his biggest caper, Kott's brokerage customers lost as much as $400 million. His operations have been run out of a number of countries, but now he is back in the U.S., operating right under the noses of government regulators, including the Securities and Exchange Commission and the National Association of Securities Dealers (NASD).

Kott is a powerful figure behind the scenes at JB Oxford & Co., a small discount brokerage with big pretensions whose parent company, JB Oxford Holdings, has become a darling of a group of online investors, to the point that many of them have bought stock in the brokerage company. Hundreds of messages about the company, based in Beverly Hills, California, have been posted in America Online's Motley Fool electronic forum, which has been prominent in boosting prices of a number of issues. Last year the company's stock opened at $1 a share and shot up to nearly $4 in December, ending the year at $2. This year, despite a torrid market, the stock has not done as well as its online admirers might wish. At week's end it closed at $1.75.

Few of the mostly small investors who have put money into JB Oxford's stock know about Kott's ties to the firm, because his name appears nowhere in the company's SEC filings. Why? According to JB Oxford, Kott is nothing more than a consultant to the brokerage company. Kott too, in faxed communications with TIME, reiterated the company's official explanation. In reality, he wields so much influence that several former employees told TIME they regarded him as the de facto CEO. There have also been allegations--hotly denied by Oxford--that the firm is engaging in some of the same dubious practices that were employed by other Kott-related brokerages in the past. Stephen Rubenstein, Oxford's chairman and CEO, insists that despite Kott's association with the company, JB Oxford is a clean operation making an honest living in one of the hottest markets in history.

But making an honest living is not an Irving Kott hallmark. Although he claims Canadian residency, Kott spends much of his time in California and lives at a rented 4,000-sq.-ft. mansion in Beverly Hills with a swimming pool and tennis court that was once the home of Cary Grant. Officially, the tenant is Rhoda F. Kott, Irving's wife, and there's a reason: by claiming Canadian residency, Kott has been able to avoid being served with subpoenas at JB Oxford's headquarters. Until a few months ago, Oxford reimbursed Kott's consulting firm for the rent.

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