The market's response to this pedigree? IPS Health Care started trading at just under $8 a share and soared to $10.25 in just five months; it now trades at about $6.50 a share.

More recently, there was Ropak Laboratories, which came to market via Stratton Oakmont in May. The Ropak prospectus also disclosed the S.E.C. inquiry but with an added caveat: "An unfavorable resolution of the S.E.C. investigation," it said, "could have the effect of limiting the underwriter's ability to make a market in the company's securities."

And did potential investors read this and run? No, Ropak's shares came public at $4.50 and zoomed to $9.25 a share in less than four months, before subsiding to $8.50 a share. But even today's prices are a boon to the lucky people who owned warrants to buy Ropak's stock at $2.25 to $4 a share, of course.

The Ropak warrant holders include two men -- Harvey Bibicoff, a Hollywood executive, and Gerald L. Cohn, a director of Hazleton National Bank in Hazleton, Pa. -- who seem to pop up in many Stratton deals.

Mr. Cohn is an big investor in IPS Health Care and arranged for it to get financing through the Hazleton bank. He is also a director of the DVI Financial Corporation, which leases equipment to IPS Health Care and raises money through Stratton. DVI's shares traded at less than $9 last October and almost doubled to $14.125 in March, before drifting back to $8.60 recently.

Mr. Bibicoff, too, is an investor in IPS and was an early investor in DVI Financial. But his starring role is as chairman of the Ventura Entertainment Group, a television production company, which sold shares through Stratton last year.

A careful reader of that prospectus, dated May 31, 1990, might have noticed a regulatory flag. Ventura disclosed that the S.E.C. was seeking information about, among other things, "the relationships between the company's principal stockholders and certain underwriters and market makers of the company's securities."