THE SECRET LIFE OF JB OXFORD

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...