Police and special investigators swooped on an unauthorised stock trading operation in Canada. One of the companies being traded in was former Bermuda-based First Ecom.com.

First Ecom.com's career ended after its Nasdaq listed shares dropped from a high of $34 to negligible value and the company moved from e-commerce into oil and gas exploration under the name Brek Energy Limited.

According to the Vancouver Sun, British Columbia Securities Commission investigators and eight uniformed police raided a Vancouver premises in November and found a “classic boiler room operation”.

It involved 17 “phoners” grouped around a bank of telephones, scripts used to tout stocks and lists of phone numbers for people in Canada, the UK, US and other countries.

The boiler room participants allegedly encouraged stock trading and dispensed stock advice without being registered to do so, the November 23, 2002, article states. According to the website of the British Columbia Securities Commission, a cease trading order was issued in November against nine companies, including Brek Energy Limited and its affiliate, Villenar Energy Corp.

In response, Brek Energy Limited announced that, due to the order, Richard Jeffs has resigned from Brek Energy Limited only a month after replacing Gregory Pek as president and CEO of the company, formerly First Ecom.com.

The web-based newsletter, Inside Bermuda, has been following the progress of First Ecom.com since November 2000 and carried a full report in its latest issue on the BCSC investigation.

Authorities were apparently alerted to wrongdoing by the participation in the operation of one Frank Biller, who previously received a ten-year trading ban for his role in Eron Mortgage Corp. in which 3,200 investors lost more than $200 million.

Brek Energy has a track record of frequent securities offerings with the proceeds used for questionable investments.

On September 18, 2002, Brek filed a Registration Statement with the SEC regarding 8.02 million shares that insiders intended to sell, with none of the proceeds going to the firm.

Among them were 748,000 shares registered to “Warwick Ventures Limited - Stuart Smith, c/o LOM Securities Bermuda Ltd.”

Two of the parties named in BCSC order, Rick Jeffs and Wet Coast Management of which he is a director, filed to sell a total of 2.475 million shares.

Last month LOM issued a statement to The Royal Gazette that they had ceased to have any dealings with First Ecom.com almost two years ago, and the company declined to answer further queries in relation to the company.