Gradient and Rocker deny accusations in the civil suit, which was amended with more allegations Oct. 12. In a letter to customers after the suit was filed, Gradient said, "Our opinions are not, and never have been, 'for hire.' "

Demetrios Anifantis, 30, a former Gradient customer representative, said in an interview that the SEC questioned him earlier this month about an affidavit he gave in September to support Overstock.com's suit.

He said in the affidavit that David Rocker frequently asked Gradient to put more negative information in its Overstock.com reports and that Gradient delayed publication until it had sent Rocker Partners copies. Rocker Partners wanted to "get their own position in the stock" before the report was published, Anifantis said.

Anifantis said he regularly took part in conference calls between Gradient executive Donn Vickrey and David Rocker, the hedge fund's managing partner. "The holding of reports was routine," Anifantis said. He didn't say why Gradient would agree to do so.

Anifantis was fired from Gradient after a year in November 2004. He said the company accused him of sending company documents to his home. He said employees often took their work home and said he was fired because he began asking his superiors about Rocker's influence on its reports.

Daryl Smith and Robert Ballash, former Gradient salesmen, said in telephone interviews that other hedge funds influenced Gradient reports on companies. They declined to name the other hedge funds or the companies. Ballash worked at Gradient for one year; Smith for about 2 1/2 years.

Both men say they were fired shortly after they began asking about the relationship with Rocker Partners. Gradient's explanation for the dismissals was poor performance, the men say. Both are Arizona residents. Gradient declined to comment on the former employees.

"I have some very strong views about this matter which will be expressed in detail in our response to the amended complaint," Vickrey said.

Nine-year-old Gradient, which changed its name from Camelback Research Alliance earlier this year, does quantitative and qualitative research on publicly traded companies, including reports on companies that may have earnings problems.

Some Gradient negative reports proved accurate. The firm issued warning reports about Krispy Kreme Doughnuts Inc. in 2003. Last year the SEC began an investigation into the company's accounting practices. Its shares have fallen 64 percent this year.

About two-thirds of Gradient's 100 customers are mutual funds. The rest are hedge funds, some of which specialize in short-selling.