Passiveguy, a former attorney, laid out a set of guidelines that agents should follow if they are setting up a publishing program.  You can read it here: http://bit.ly/lJk5gB

Great stuff and spot on the money in my opinion, but the truth is I laughed about halfway through because it was far, far too logical and above board for any agent to do these days. Which is a bummer.

So I stand by my position. Any agent who continues to represent clients to traditional publishing and also sets up a publishing house of their own, for whatever reason, is a scam (Unless, in the unlikely event they follow Passiveguy’s advice.)

(A logical but laughable question. Do any of the agencies thinking of doing this or starting this have attorneys who understand agency law and conflict of interest?)

Avoid these agents at all costs, folks.