By James Langton

(November 09 – 19:30 ET) – The Securities and Exchange Commission has learned that 15-year old kids aren’t the only ones perpetrating cyberspace securities fraud. Hard core criminals are at it, too.

The SEC has been granted several emergency orders to halt an online securities fraud. Over US$1.3 million has been raised from at least 1,000 investors by selling unregistered securities of micro-cap companies, says the SEC.

In the latest SEC case defendant Edward Williamson III is described by the SEC as “a securities recidivist. ” He is owner of Fifth Avenue Communications Inc. and AGE Investment Company. The SEC’s lawsuit alleges that from at least April of 1997 to the present, Williamson organized a fraudulent scheme to fraudulently sell US$1.3 million of securities, providing investors with false and misleading information, and failing to disclose information that was material.

Investors were not informed of the key role Williamson played with the defendant companies, says the SEC, adding that his lack of disclosure was significant because of Williamson’s extensive criminal and regulatory history. In June, the SEC ordered Williamson to cease-and-desist from committing securities fraud and barred him from participating in penny stock offerings.

Investors were falsely told that the proceeds from the offerings would be used by the companies for legitimate business purposes, the SEC alleges. Approximately half of the US$1 million raised in the Net World offering was siphoned off by Williamson.

The SEC is now seeking preliminary and permanent injunctions, disgorgement and civil penalties against all defendants. Additionally, it is seeking an order requiring Williamson to comply with the terms of a prior order barring him from acting as an officer or director of a public company.