A surprising 74 percent of the 62 brokerage firms that follow companies that filed for bankruptcy protection between May 1 and Aug. 31 continued to recommend those companies to investors even as they were seeking protection, according to a Weiss Ratings study.

Still, that’s an improvement on the first four months of the year, when 91 percent of the firms issued “buys” and “sells” on the troubled companies. Here’s more good news. While only 9 percent of the ratings issued to the bankrupt companies in the first part of the year were “sells,” 27 percent were “sells” in the latest four-month period.

Brokerage firms contacted for comment about the survey failed to return calls.

“Given the highly misleading ratings still being disseminated by the brokerage community, it's no wonder investor confidence in the markets remains so low,” said David Lackey, president of Weiss Ratings, in a statement. “Wall Street clearly has a long way to go before genuine reform takes hold.”

Of the 19 troubled companies rated by brokerage firms, 47 percent received only positive ratings on the date of their bankruptcy filing, according to the survey. On the day it filed for Chapter 11,for example, APW received two “buys” and five “holds.” Another nine companies received a mix of positive and negative ratings, including Adelphia Communications, which received five “buys,” three “holds” and two “sells,” and WorldCom, which got seven “buys,” six “holds” and 14 “sells.”

Of the brokerage firms studied, 34 failed to issue a single “sell” rating on any of the companies.

For instance, CIBC World Markets maintained three “buy” ratings and two “hold” ratings on troubled companies, while Thomas Weisel Partners maintained three “buy” ratings and one “hold” rating. Additionally, Goldman Sachs and Credit Suisse First Boston each maintained five “hold” ratings on failed companies at the date of bankruptcy.

Merrill had just one “hold” and four sells at the time the companies it ranked sought bankruptcy protection; Salomon Smith Barney had four “holds” and two “sells;” Morgan Stanley had one “hold” and ” four “sells,” and Prudential had one “hold.”