I'm continually amazed at the layers that keep revealing themselves as we pick at the onion that is Stinger Systems (Pink Sheets: STIY). The aspiring stun-gun maker was a hot issue earlier this year, when investors thought it might be the next Taser International (NASDAQ:TASR). Since then, the stock has cratered, and the bad news has just kept coming.

On July 22, while I was on vacation (there's the excuse for the lateness of these comments), Stinger produced a press release revealing that the Securities and Exchange Commission had served the company with a Wells Notice.

A quick review: A Wells Notice -- please visualize my finger quotes -- is "bad." It's a formal recommendation by SEC staff that the commission take action against a company for violations of securities laws. In Stinger's case, the allegations involve claims about the company's products as well as private placements of the firm's stock.

Here's something worse: You need to read the July 20 amended registration statement to find out that this SEC trouble began way back in December 2004. It doesn't mention when it received the Wells Notice, but if it's known about it since the beginning, that's right, Stinger fans, you would have found out only eight months after the fact. And you may wish to note that Stinger has filed no less than three other registration statements in the intervening time, none of which mentions the SEC's action.

Why would Stinger sit on this major news for so long? I guess old habits are hard to break.

I've noted several times that Stinger has a bad tendency to keep very important news from investors for long periods of time. For instance, it seems to have kept its recent management resignations -- the departure of the much-hyped, short-lived team from Smith & Wesson Holdings (AMEX:SWB) -- on the down low for a month. It continually told investors to expect stun guns by Q2 of this year, only to slip a quiet notice about major problems into a later registration statement.

I've said several times that Stinger looked likely to me to follow the same path as the other companies piloted by current CEO Robert Gruder. That is, straight into the ground. This latest tardy admission only reinforces my belief. Acompany that can produce press releases touting products it's not even selling yet, but can't be bothered to tell you when the SEC raises the hammer. ... Let's just say the people running the outfit probably have something on their minds other than making money for shareholders.

Ignore the hype. Stay away from this stock. It will only make your eyes water.

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Seth Jayson urges all investors to follow their noses. At the time of publication, he had no positions in any company mentioned. Taser International is a Motley Fool Rule Breakers pick. View Seth's stock holdings and Fool profile here. Fool rules are here.