National Research Group head Joe Farrell circulated a memo to his entertainment industry clients last Friday that denied charges in a Wall Street Journal article that his company doctors film test data.

The memo, by Farrell and NRG co-chairperson Catherine Paura, obtained by Daily Variety, read in part: “The accusations of the article are totally false. The accusations are unrealistic and ignorant.”

The memo ascribed the attacks to “jealous, vindictive people” who had been dismissed by the company and/or “have some ax to grind.””It annoys us that the Wall Street Journal would legitimize such nonsense with an article impugning our character and the integrity of NRG’s work.”

Farrell could not be reached for comment.

Industry response to Friday’s Wall Street Journal attack on Farrell’s practices and methodology ran the gamut from disbelief to shrugs.

“That he would fudge his numbers just doesn’t make any sense,” said Columbia senior veep Sid Ganis.

But a senior exec at another studio said he had not read the report because he assumed it was “a puff piece.” When told the article’s thesis, he responded with a sarcastic “Noooo!”

None of the studio execs polled indicated they would be scrutinizing contracts with NRG.

The Journal story chronicles dozens of incidents in which NRG supposedly altered data. They included doctoring reports to fit demographic requirements to instances in which Farrell allegedly altered data at the behest of studios or filmmakers.

NRG counts among its major clients all Hollywood studios with the exception of Universal. In most instances, the company has contracts of exclusivity. The company supplies market research, such as focus groups, tracking studies and test screenings.

In recent weeks there has been a rumor that Lieberman Research, an NRG rival, is contemplating a restraint of trade action against Farrell’s company. Calls to Lieberman were not returned.

Frank Luntz of D.C.-based Luntz/Webber Research said that his observation of NRG’s methods displayed only a “1970s sophistication.” Luntz/Webber, whose client roster is mostly political, does entertainment research for New Line Cinema and Turner Pictures.

“When we first bid projects in Hollywood, we were shocked to find a virtual monopoly,” said Luntz. “It’s comparableto polling for Clinton, Bush and Perot and suggests both a general cowardice and lack of sophistication. Whatever problems exist, the blame has to be placed squarely on the industry.”

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