(FORTUNE Magazine) – ParkerVision, a ten-year-old company based in Jacksonville, is a stock market phenomenon. It has never made a penny (in fact, ParkerVision has lost more than $20 million in the past 5 1/2 years) and, unlike most Internet companies, is not growing what little business it has (its revenues reached a height of just $10.8 million back in 1997). Yet ParkerVision, which went public in November 1993, has seen its market value increase from just over $40 million to more than $300 million recently--a multiple of 30 times revenues. Its stock, meanwhile, has doubled since mid-1998.

ParkerVision claims to have developed a "truly incredible breakthrough" in radio technology--a microchip receiver that converts radio waves into data, called Direct2Data or D2D. But there is little evidence that big companies are scrambling to get their hands on it. A much heralded 1997 agreement with IBM was terminated by Big Blue in early 1998. And although ParkerVision said it was filing for patents related to its wireless technology in 1996, it has yet to receive any D2D patents. A well-known short-seller, Manuel Asensio, says that engineering studies show that ParkerVision "possesses no valuable technology." (ParkerVision did not return repeated calls for comment.)

But there's a lot more to this story than a classic tale of management vs. short-sellers. An interesting cast of characters has been supporting ParkerVision, including a New York micro-cap brokerage firm named Whale Securities (which has paid hundreds of thousands of dollars in fines to the NASD for various transgressions), a Swiss bank called Banca del Gottardo, and a money manager at one of the nation's blue-chip investment firms, Neuberger Berman (which went public Oct. 7). To top it off, the money manager has been suspended for possible improprieties relating to ParkerVision and other small-cap stocks, and Neuberger is conducting an internal investigation into his activities.

The story begins with Whale Securities, which not only took ParkerVision public but later signed an agreement to be its financial adviser, for which it received warrants to purchase 200,000 shares at $10 per share. Whale analyst Cary Retlin wrote in a November 1998 report that ParkerVision could reach $90 to $100 in two to three years. But an affiliation with Whale doesn't portend good things. According to Securities Data, some 80% of the IPOs that Whale has underwritten since 1983 are trading below their IPO price, and roughly 10% have declared bankruptcy. (Whale's CEO was unavailable for comment.)

In 1996 and 1997, Banca del Gottardo arranged two overseas private placements for ParkerVision totaling more than $28 million. (Skeptics point out that few companies with groundbreaking technology have to resort to raising capital that way.) In the first half of 1999, the bank's deputy chairman of the board, Francesco Bolgiani, who that spring personally owned more than 100,000 shares of ParkerVision, joined its board.

But the most surprising member of the ParkerVision party is a money manager in Neuberger Berman's high-end private asset-management business named Jack Ferraro. Ferraro has been at Neuberger for about 20 years; post-IPO, his stock in the firm is worth more than $6 million. ParkerVision filings show that for "acting on behalf" of ParkerVision in those Banca del Gottardo placements, Ferraro, not Neuberger, personally received a purchase option for 125,000 ParkerVision shares in 1996 and a warrant to purchase 180,000 ParkerVision shares in 1997, both at below-market prices.

Ferraro has also publicly supported ParkerVision--but without mentioning his personal stake. "It's a nascent technology, but I think it can do what they say it can do. The potential should be extraordinary," he was quoted as saying in 1998 in Florida Trend magazine. Much of the activity in ParkerVision stock throughout 1999 can be traced to Neuberger Berman: According to data from Bloomberg, Neuberger Berman has been one of the top market makers, controlling an average of around 15% of the volume.

This isn't the first time that Ferraro, Whale, and Banca del Gottardo have been involved in the same company. In 1987, Whale handled the IPO of Showscan Entertainment, which claimed to have a special high-definition filmmaking process. In September 1995, Banca del Gottardo arranged a $7 million private placement for it; at the same time, Ferraro signed a consulting agreement with Showscan and received a warrant to purchase 100,000 shares. Showscan sold for more than $7 in 1996, but in the fall of 1998 it was delisted by Nasdaq and now trades on the OTC Bulletin Board for about 10 cents a share.

There are additional instances involving less-than-prestigious brokerage firms, penny stocks, Banca del Gottardo, and Neuberger's Jack Ferraro. Banca del Gottardo arranged millions of dollars in financing for Ferrara Food, an importer of specialty foods, and Vasomedical, which under its previous name, Future Medical Products, was supposed to make a wear-able device that mitigated the symptoms of drug addicts undergoing detox. Ferrara went public by merging into a business entity underwritten by Stratton Oakmont, which was expelled from membership in the NASD in early 1997. In addition, two former Stratton officers have pleaded guilty to charges of securities fraud. Vasomedical was taken public in 1988 by a firm called Individual's Securities, which was expelled from membership in the NASD in 1989. Banca del Gottardo's Francesco Bolgiani has been a director of both Vasomedical and Ferrara, and Ferraro has been a shareholder of both. After a string of disasters that included misstated financial results, what was left of Ferrara was sold in mid-1996 for a grand total of about $1.6 million (vs. its market value of more than $20 million in mid-1995). Vasomedical now sells for just over $1 a share.

As for ParkerVision, it just announced a licensing agreement with Symbol Technologies, a Long Island-based provider of wireless area-network solutions, but Asensio calls it a "bogus deal," saying that the "Symbol announcement is not the first time that ParkerVision has issued false claims."

Since the deal was announced, ParkerVision's stock has plummeted some 25%. The jury is still out on whether Asensio is right about ParkerVision's technology, but if you judge a stock by the company it keeps, none of this looks good.

--Bethany McLean