<SKUP>
The article reprinted below is a couple of weeks old. I'm
posting it because it is a must read:
Two-time loser rolls dice again
in twisted penny stock ploy
Convicted of murder and paying a bribe, Eddie Williamson is at it
again in a tangled game of who-owns-what
OPINION
By Christopher Byron
MSNBC CONTRIBUTOR
July 6 — In his private notebooks, F. Scott
Fitzgerald observed that in American lives there
are no second acts. Then again, F. Scott Fitzgerald
never met Edward B. Williamson III — a man
whose still-unfolding career stands as an enduring
testament to just how far a fellow can get from his
past on a ready smile and a hot stock tip.
THE BIZARRE SAGA of Eddie Williamson also stands
as a cautionary reminder of the risks that any investor takes
when he puts his money in the pick-your-pockets Over The
Counter market, where types like Williamson build their
careers out of laughing at the law.
These days, Williamson, 52, runs — or at least is closely
associated with — a successful stock promotion firm with
headquarters in an elegant address on New York's Fifth
Avenue, with another office in Wichita, Kan., his boyhood
hometown.
In the past year, the firm in question, Fifth Avenue
Communications, has helped a number of Over The Counter
Bulletin Board stocks — several with fashionable “dot coms”
in their names — catch fire with investors, even as
Williamson himself has participated in a
mergers-and-acquisitions program for mid-career business
and finance executives at the Wharton School of Business at
the University of Pennsylvania.
But the folks at Wharton would have been astonished
had they looked into the history of the man they chose to let
into their program: a two-time federal felon with a rap sheet
far, far beyond the ordinary for a typical Wall Street sharpie.
Our story begins in 1967 when Williamson, then an
enlisted man in the U.S. Marine Corps on Okinawa, killed a
taxi driver during a robbery attempt. He was convicted of
murder by a general court martial and was sentenced to 11
years confinement, which he served at a medium-security
federal prison in El Reno, Okla.
He became eligible for parole in June 1971 after serving
nearly four years and was released a month later. He headed
for Denver, setting himself up in the penny stock racket. By
1974 he sported the title of president of several Denver-area
start-ups, all bearing impressive-sounding names in medical
technology.
One of them — CEA Lab Inc. — has gone through a
25-year series of name changes and permutations to emerge
today as the fountainhead of a slew of Williamson-linked
stock promotions.
By contrast, another of his early start-ups — Cancer
Diagnostics Inc. — was popular for a time among penny
stock gamblers back in the 1980s but today is all but
forgotten. Its most recent trade — at 1/10th of a penny —
took place on Feb. 3.
Throughout the 1980s, Williamson managed to stay out
of trouble, but by the start of the '90s his luck had run out.
His problems began when he used his stock promotion
company, Williamson & Associates, to buy an Englewood,
Colo., penny stock firm: Securities USA Inc.
Almost immediately, the National Association of
Securities Dealers brought a disciplinary action against the
firm, charging it with submitting inaccurate reports to the
NASD, failing to maintain minimum net capital requirements,
and funding a loan with a bad check. In the end, Securities
USA was expelled from the industry, and Williamson had to
agree never again to take an ownership interest, either
directly or indirectly, in an NASD member firm.
But Williamson was hardly about to quit Wall Street
altogether. By the mid-1990s he was busy in New York
promoting the fortunes of a Queens, N.Y., company called
OMAP Holdings Inc. that manufactured vending machines,
electrical heaters and some kind of patented device to make
french fries.
In the
process, he got
swept up in an
undercover FBI
sting operation
against penny
stock promoters and was one of 44 individuals arrested in
the case in October 1996. Williamson's special bad luck
was to have attempted to bribe an undercover FBI agent to
promote the OMAP shares — and to have advised the
agent to help him cover his own tracks by issuing him a
phony invoice for the bribe payment. In the spring of 1997,
Williamson pleaded guilty to a criminal charge and was
sentenced to two years of federal probation.
After his arrest, in an apparent effort to make the best
of a bad situation, Williamson changed his company's name
from Williamson & Associates to Fifth Avenue
Communications. In January 1997, prior to pleading guilty,
he had Fifth Avenue issue a press release saying that the
business was being sold by its otherwise unidentified owner,
CEA Lab (that, of course, being Williamson's own
company from as far back as 1974), to a penny stock outfit
going by the name of Auburn Equities.
DID THE DEAL GO THROUGH?
And that's where we pick up the story as it unfolds
today.
Whether the Auburn transaction ever went through —
or if it did, whether it meant that Williamson was no longer
calling the shots at Fifth Avenue — is open to question.
For one thing, a June 1998 membership profile
supplied by Williamson about himself on the Silicon Investor
Web site lists his company affiliations as “Williamson &
Associates” and “Fifth Avenue Communications” —
indicating that 18 months after having ostensibly sold the
firm, he was claiming still to be involved with it.
What's more, records on file at Network Solutions
Inc., the Internet domain registration service, show that as
recently as March 28, 1999, Edward Williamson was listed
as the billing contact for Fifth Avenue Communications'
Web site (www.stocksfifthavenue.com), and his brother,
Randy Williamson, was listed as the site's administrative
and technical contact.
Meanwhile, Fifth Avenue continues to pump out
promotional materials in support of companies in which
Williamson and/or his associates have apparent interests.
For example, on May 4, Fifth Avenue Communications
issued a press release that enumerated many of the firm's
clients. Among them was Stockup.com, which had risen in
previous months from $3.50 per share to a high of nearly
$40 and is now trading at around $14.50.
The Fifth Avenue Communications Web site has itself
recommended Stockup.com for purchase — as recently as
June 17. On both the Web site and in press releases, Fifth
Avenue has pointed out that Stockup.com was until recently
known as Courtleigh Capital Inc., before it merged with a
privately owned Las Vegas company, Marketing Direct
Concepts — and acknowledged as well that before
becoming Courtleigh Capital, the company had been known
as the by-now-familiar CEA Lab. But the fact that
Williamson himself had been CEA Lab's founder, president
and relentless promoter for the last quarter-century — and
thus now apparently held a major stake in Stockup.com —
was something that neither the press releases nor the Web
site chose to mention.
THE USUAL SUSPECTS
In a similar spirit, consider another Fifth Avenue client
— Autoauction.com — which has risen from less than 50
cents in April to $9.50 and claims to be in the business of
auctioning automobiles over the Internet.
On June 6, Fifth Avenue's Web site said of this outfit,
“(T)he Company projects revenue of $44 million, earnings
of $1.4 million, or about 25 cents per share… Solid
business. Good growth rate. Great little acorn.”
One reason Fifth Avenue might have been so effusive
about Autoauction.com's prospects could be that,
according to the available records, Fifth Avenue may be
owned by Autoauction.com.
We may suspect this because of a May 5, 1999, Fifth
Avenue press release. This release announced that a penny
stock company called Turner Group Inc. was merging with
a Florida company called Airport Auto Auction Sales Inc.
and would be renamed Autoauction.com, to begin trading
under the symbol AAAC.
But two years earlier, in June 1997, a Fifth Avenue
press release announced that the same Turner Group had
agreed to merge with and take over none other than Auburn
Equities Inc. — the same outfit to which CEA Lab sold
Fifth Avenue (or said it planned to) back in January 1997.
In other words, if the press releases are accurate (and
there's no way to know), Williamson's long-time company,
CEA Lab, sold his stock-touting business to a penny stock
company (Auburn Equities Inc.) in January 1997 or
thereabouts … after which Auburn itself merged several
months later into another penny stock company (Turner
Group Inc.)… which thereafter morphed itself into a
company called Autoauction.com … that is now
recommending itself for sale via a stock promotion firm that
it would appear in fact to own — namely, Fifth Avenue
Communications.
On the other hand, if the press releases don't tell the
real story, and it turns out that Fifth Avenue
Communications was never sold to Auburn Equities, a
different — but equally awkward — problem arises. That's
because, according the early press release announcing the
deal with Auburn, CEA Lab in fact owned Fifth Avenue.
And, as noted above, CEA eventually merged with and
became Courtleigh Capital, and thereafter morphed into
Stockup.com.
Were that the true picture, it would mean that when
Fifth Avenue Communications was recommending
Stockup.com on its Web site, Stockup.com in reality was
recommending itself — the exact mirror image of the
problem that would have existed if the sale to Auburn had
gone through and Fifth Avenue had wound up being owned
by Autoauction.com.
YET ANOTHER POSSIBILITY
And what is Williamson's own interest in this —
assuming, of course, that he isn't in fact pulling the strings
for the whole thing? Here's one possibility: a side deal with
Autoauction.com itself.
This possibility arises because Autoauction.com
doesn't actually have a functioning Web site at all
(surprised?). Thus, according to a Fifth Avenue
Communications Web site announcement, Autoauction.com
is “beta-testing” its software at the site www.o-c-s.com.
This site turns out to be owned by a penny stock
company going by the name of Net World Marketing Inc.
What's that? A check with Network Solutions Inc. records
for the site reveals that Net World Marketing's corporate
address is given as #400 North Woodlawn, Suite 18,
Wichita, Kan.
That's the same address, right down to the office suite,
that is listed in Network Solutions records for Fifth Avenue
Communications.
The administrative and technical contact for the Net
World Marketing site? Who else but Ed's brother, Randy?
The billing contact for the site? Williamson's wife,
Georganna, whose name appears in NASD records as far
back as 1989, when she turned up as a director of
Securities USA, the Colorado penny stock brokerage firm
that was expelled from the industry not long after
Williamson bought it.
Such entanglements and undisclosed interests abound
in Fifth Avenue promotions.
Because the companies that Williamson promotes are
so-called Bulletin Board stocks, and have thus traditionally
been viewed as too small or obscure to be required to file
audited financial statements with the SEC and shareholders,
investors wanting to buy their stock have had no source of
information beyond the companies' own press releases. It's
the same for nearly all Bulletin Board stocks, whether they
be Williamson promotions or not.
The Securities and Exchange Commission is now trying
to stamp out such abuses by phasing in a rule that no
Bulletin Board company can be quoted by an NASD
broker-dealer unless the company files audited financial
statements. But the law will not go fully into effect until next
year, and in the meantime the market for fool's gold on the
Bulletin Board just keeps rolling along. As always, one
word of warning should say it all: Beware!
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