By James Langton

(December 13 – 10:50 ET) – The Ontario Securities Commission has slapped cease trading orders against four individuals operating Internet sites alleged to be in violation of securities laws.

Notices of Hearing and Statements of Allegations were issued against each of the four individuals. A hearing date has been set for December 20, and at that meeting OSC staff will seek an extension of the temporary orders.

The individuals, along with their sites and mailing lists, are alleged to be promoting the unauthorized distribution of securities. None of them were registered with the securities commission.

The OSC has served notice to Monte Friesner, a Toronto resident and president of First Federal Capital Corp. The commission alleges that Friesner promoted investment products and services through a Web site, www.firstfederalcanada.com, offering annual returns of 50% to 70% without risk. Staff allege that this investment scheme is similar in nature to those generally referred to as “Prime Bank Note” schemes.

Also nailed was Robert Cranston, a London, Ont. resident and operator of Global Privacy Management Trust, who the OSC alleges promoted an offshore debenture trading program on the web site www.gpmt.com. The returns on one of these programs were claimed to be in the range of 12% per month. Cranston is alleged to have solicited investors to a Secure Private Placement while claiming affiliation with an entity registered in Ontario as a Limited Market Dealer.

Terry Dodsley, a resident of Campbellford, Ont., allegedly promoted himself as an international investment consultant via an Internet site, at www.cashgalore.com/comtrade.htm, and ads in a small community newspaper. The investment vehicles he promoted offered a return of 186% with minimal or no risk.

Warren English, a resident of Pickering, Ont., is alleged to be the operator of Offshore Marketing Alliance. OSC staff allege that English promoted a number of investment offerings through an electronic mailing list he controlled, including one that offered a return of 50% in a 90-day period.

According to the OSC, the move against these Internet sites is the culmination of months of surveillance and investigations focusing on Ontario-based sites by the staff of the commission. It is the first time the OSC has moved against operators of Internet sites.

“Our goal is to focus on intervening with potentially fraudulent sites at the earliest opportunity,” said Colin McCann, an investigator with the enforcement branch of the OSC. “We have taken this action in order to reduce the likelihood of persons falling victim to scams and also to educate the public that investing with unknown Internet entities should not be undertaken without thoroughly researching the person and the company making the offering.”