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! google.com |
