Prime Carbon produces and trades carbon credits created through soil enhancement and carbon sequestration programs. The Federal Court's Justice Jeffrey Spender found that Prime Carbon was in breach of the Trade Practices Act between July 2008 and December 2009 by claiming a false association with the National Stock Exchange of Australia.

Justice Spender also found that between July and December 2008 Prime Carbon had made misrepresentations concerning the National Environment Registry including that the registry was regulated by the federal government, which it is not, and that the registry had an arrangement with the Chicago Environment Registry, which it does not.

The court orders follow action by the Australian Competition and Consumer Commission and its sole director, Kenneth Bellamy, in December.

Mr Bellamy was found to have been knowingly involved in the misleading conduct.

Justice Spender ordered Mr Bellamy to undertake compliance training, to desist from engaging in such conduct, to publicise the court's orders to its customers and on its website, and for Prime Carbon to pay the ACCC's court costs.

ACCC chairman Graeme Samuel said the result should send a message about greenwashing marketing. ''Companies operating in the carbon credit market need to be on alert: the ACCC is closely monitoring this industry sector and if you are making representations that you cannot substantiate, we will take action to ensure your compliance with the act,'' he said.

In January, Mr Samuel told The Age that there had been an alarming rise in complaints about misleading green advertising, from none two years ago to about 500 since early 2008. He called on Parliament to pass laws that would give the ACCC powers to issue fines up to $1.1 million.

Prime Carbon did not return calls yesterday.