Saving the world with Ray Dirks

In the three decades since he blew the lid off the famous Equity Funding Corp. of America scandal, research analyst Ray Dirks’s career has taken some strange twists.

Once one of the top analysts on Wall Street, first at Bankers Trust, then at Goldman Sachs, Dirks spent most of the 1970s and early ‘80s bouncing from one small brokerage to the next. Last month he burnished his offbeat reputation by staging a press conference at the Friars Club - famous for its obscenity-laced celebrity roasts - to tout a home anthrax test. Dirks, 67, is an informal adviser to Vital Living Products, an over-the-counter microcap that manufactured tests for arsenic and bacteria before the recent bioterrorism attacks. The anthrax kits, expected to retail for about $20, will allow individuals to test air, surfaces and water. Charlotte, North Carolina-based VLP hopes to begin shipments by Thanksgiving. “I’ve checked it out - it gets the Ray Dirks seal of approval,” says Dirks. In 1973 Dirks, then an insurance analyst at research boutique Delafield Childs, was contacted by a whistle-blower who alleged that top executives at Los Angeles-based Equity Funding had faked $2 billion in life insurance policies to inflate their assets. Dirks told a few of his clients - institutional portfolio managers with large Equity Funding stakes - and the stock plummeted, bludgeoning the entire market. Dirks’s warnings prompted the SEC to bring insider-trading charges against him, but he was vindicated by a landmark 1983 Supreme Court decision. As for anthrax, “sad as it is, there is tremendous opportunity here,” says Dirks, who has run his own investment shop, Dirks & Co., since 1997.

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