UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K
                                 CURRENT REPORT

     PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

                                 March 21, 2005
          -------------------------------------------------------------
                Date of Report (Date of earliest event reported)

                             A.B. WATLEY GROUP INC.
          -------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                      1-14897              13-3911867
(State or other jurisdiction of   (Commission File Number)    (IRS Employer
          incorporation)                                    Identification No.)

                                 90 Park Avenue
                            New York, New York 10016
          ------------------------------------------------------------
          (Address of principal executive offices, including zip code)

                                 (212) 500-6500
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
          ------------------------------------------------------------
          (Former name or former address, if changed since last report)

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

|_|   Written  communications  pursuant to Rule 425 under the Securities Act (17
      CFR 230.425)

|_|   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)

|_|   Pre-commencement  communications  pursuant  to  Rule  14d-2(b)  under  the
      Exchange Act (17 CFR 240.14d-2(b))

|_|   Pre-commencement  communications  pursuant  to  Rule  13e-4(c)  under  the
      Exchange Act (17 CFR 240.13e-4(c))

<PAGE>

SECTION 1 REGISTRANT'S BUSINESS AND OPERATIONS

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

Effective  March 21, 2005 we entered into a two year  employment  agreement (the
"Employment  Agreement")  with John G. Hewitt  pursuant  to which Mr.  Hewitt is
serving as our Chief Executive  Officer and is also serving as the President and
Chief  Executive  Officer for our wholly owned  subsidiary,  A.B. Watley Direct,
Inc. The term of the agreement is extendable  for additional one year periods at
the mutual discretion of the parties.  The Employment Agreement provides for the
payment  of a base  annual  salary  of  $250,000  to Mr.  Hewitt  together  with
5,000,000 shares of our restricted common stock (the "Compensation  Shares") and
7,500,000 common stock purchase warrants (the "Compensation Warrants"). See Item
3.02 hereof.  The warrants are subject to  anti-dilution.  Mr. Hewitt is further
entitled to participate in our proposed  employee bonus pool which may be funded
with up to 25% of our annual net profit,  if any, for the twelve  month  periods
commencing April 1, 2005. In the event the Employment Agreement is terminated by
Mr. Hewitt for "good reason",  as such tern is defined therein, or is terminated
by us "without cause", as such term us defined therein,  we are obligated to pay
Mr. Hewitt all of the base salary due for the remainder of the term. Further, in
the event of termination for "good reason",  "without cause" or as the result of
the death or disability of Mr. Hewitt, all of the Compensation  Warrants will be
given the  opportunity  to vest for the remainder of the term, and at the end of
the term all non-vested  Compensation  Warrants will be cancelled.  In the event
that during the first year of the term,  Mr. Hewitt  terminates  the  Employment
Agreement for other than "good reason" or we terminate the Employment  Agreement
"with cause" Mr. Hewitt will be required to return the Compensation Shares to us
for  cancellation.  Further,  in the event of a  termination  at any time by Mr.
Hewitt for other than "good reason" or by us "for cause" all of the Compensation
Warrants shall become immediately void and of no further effect.

SECTION 3 SECURITIES AND TRADING MARKETS

ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES

Pursuant  to our  March  21,  2005  Employment  Agreement  with  John G.  Hewitt
described in Item 1.01 hereof,  we will issue  5,000,000  shares of common stock
and 7,500,000 common stock purchase warrants to Mr. Hewitt, each to purchase one
share of our common stock at any time during the 10 year period commencing March
21, 2005. 2,000,000 of the warrants have an exercise price of $.05 per share and
vest when and if we  achieve a  cumulative  net  profit  during  the term of the
Employment  Agreement of $1,500,000  or more.  2,000,000 of the warrants have an
exercise  price of $.20 per share and vest when and if we  achieve a  cumulative
net profit  during the term of the  Employment  Agreement of $4,500,000 or more.
2,000,000 of the warrants have an exercise price of $.40 per share and vest when
and if we  achieve a  cumulative  net profit  during the term of the  Employment
Agreement of  $7,500,000  or more.  1,500,000  of the warrants  have an exercise
price of $.40 per share and vest when and if we achieve a cumulative  net profit
during the term of the Employment  Agreement of $10,500,000 or more.  Subject to
earlier forfeiture,  as provided in the Employment  Agreement,  in the event the
cumulative  net profit target of  $10,500,000 is not achieved on or before March
31, 2009, all non-vested warrants will be forfeited.


                                       2
<PAGE>

SECTION 5 CORPORATE GOVERNANCE AND MANAGEMENT

ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL  OFFICERS;  ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS

Effective  March 21, 2005,  John G. Hewitt was appointed as our Chief  Executive
Officer and as the President and Chief Executive  Officer of A.B. Watley Direct,
Inc. For a description  of the material  terms of Mr.  Hewitt's  engagement  see
Items 1.01 and 3.02 hereof.

John G. Hewitt has more than 25 years of extensive  experience in the financial,
securities,  and brokerage fields having worked for, among others,  the New York
Stock  Exchange,  Goldman  Sachs  & Co.,  Knight  Securities,  L.P.  and  Soleil
Securities Corporation.  He has held several senior management positions and has
had experience  developing corporate strategies and marketing plans. He has been
responsible  for,  among other  things,  corporate  technology,  recruiting  and
training, finance, operations, compliance, and business planning.

SECTION 9 FINANCIAL STATEMENTS AND EXHIBITS

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(C)   EXHIBITS

ITEM NO.    DESCRIPTION
--------    -----------

10.1        Employment Agreement dated March 21, 2005 between
            Registrant and John G. Hewitt.


                                       3
<PAGE>

                                   SIGNATURES

      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                         A.B. WATLEY GROUP INC.


                                         By: /s/ Robert Malin
                                         ----------------------
                                             Name: Robert Malin
                                             Title: President

Date:    March 25, 2005


                                       4
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UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K
                                 CURRENT REPORT

     PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

                                 March 21, 2005
          -------------------------------------------------------------
                Date of Report (Date of earliest event reported)

                             A.B. WATLEY GROUP INC.
          -------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                      1-14897              13-3911867
(State or other jurisdiction of   (Commission File Number)    (IRS Employer
          incorporation)                                    Identification No.)

                                 90 Park Avenue
                            New York, New York 10016
          ------------------------------------------------------------
          (Address of principal executive offices, including zip code)

                                 (212) 500-6500
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
          ------------------------------------------------------------
          (Former name or former address, if changed since last report)

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

|_|   Written  communications  pursuant to Rule 425 under the Securities Act (17
      CFR 230.425)

|_|   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)

|_|   Pre-commencement  communications  pursuant  to  Rule  14d-2(b)  under  the
      Exchange Act (17 CFR 240.14d-2(b))

|_|   Pre-commencement  communications  pursuant  to  Rule  13e-4(c)  under  the
      Exchange Act (17 CFR 240.13e-4(c))
SECTION 1 REGISTRANT'S BUSINESS AND OPERATIONS

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

Effective  March 21, 2005 we entered into a two year  employment  agreement (the
"Employment  Agreement")  with John G. Hewitt  pursuant  to which Mr.  Hewitt is
serving as our Chief Executive  Officer and is also serving as the President and
Chief  Executive  Officer for our wholly owned  subsidiary,  A.B. Watley Direct,
Inc. The term of the agreement is extendable  for additional one year periods at
the mutual discretion of the parties.  The Employment Agreement provides for the
payment  of a base  annual  salary  of  $250,000  to Mr.  Hewitt  together  with
5,000,000 shares of our restricted common stock (the "Compensation  Shares") and
7,500,000 common stock purchase warrants (the "Compensation Warrants"). See Item
3.02 hereof.  The warrants are subject to  anti-dilution.  Mr. Hewitt is further
entitled to participate in our proposed  employee bonus pool which may be funded
with up to 25% of our annual net profit,  if any, for the twelve  month  periods
commencing April 1, 2005. In the event the Employment Agreement is terminated by
Mr. Hewitt for "good reason",  as such tern is defined therein, or is terminated
by us "without cause", as such term us defined therein,  we are obligated to pay
Mr. Hewitt all of the base salary due for the remainder of the term. Further, in
the event of termination for "good reason",  "without cause" or as the result of
the death or disability of Mr. Hewitt, all of the Compensation  Warrants will be
given the  opportunity  to vest for the remainder of the term, and at the end of
the term all non-vested  Compensation  Warrants will be cancelled.  In the event
that during the first year of the term,  Mr. Hewitt  terminates  the  Employment
Agreement for other than "good reason" or we terminate the Employment  Agreement
"with cause" Mr. Hewitt will be required to return the Compensation Shares to us
for  cancellation.  Further,  in the event of a  termination  at any time by Mr.
Hewitt for other than "good reason" or by us "for cause" all of the Compensation
Warrants shall become immediately void and of no further effect.

SECTION 3 SECURITIES AND TRADING MARKETS

ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES

Pursuant  to our  March  21,  2005  Employment  Agreement  with  John G.  Hewitt
described in Item 1.01 hereof,  we will issue  5,000,000  shares of common stock
and 7,500,000 common stock purchase warrants to Mr. Hewitt, each to purchase one
share of our common stock at any time during the 10 year period commencing March
21, 2005. 2,000,000 of the warrants have an exercise price of $.05 per share and
vest when and if we  achieve a  cumulative  net  profit  during  the term of the
Employment  Agreement of $1,500,000  or more.  2,000,000 of the warrants have an
exercise  price of $.20 per share and vest when and if we  achieve a  cumulative
net profit  during the term of the  Employment  Agreement of $4,500,000 or more.
2,000,000 of the warrants have an exercise price of $.40 per share and vest when
and if we  achieve a  cumulative  net profit  during the term of the  Employment
Agreement of  $7,500,000  or more.  1,500,000  of the warrants  have an exercise
price of $.40 per share and vest when and if we achieve a cumulative  net profit
during the term of the Employment  Agreement of $10,500,000 or more.  Subject to
earlier forfeiture,  as provided in the Employment  Agreement,  in the event the
cumulative  net profit target of  $10,500,000 is not achieved on or before March
31, 2009, all non-vested warrants will be forfeited.

                                       2
SECTION 5 CORPORATE GOVERNANCE AND MANAGEMENT

ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL  OFFICERS;  ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS

Effective  March 21, 2005,  John G. Hewitt was appointed as our Chief  Executive
Officer and as the President and Chief Executive  Officer of A.B. Watley Direct,
Inc. For a description  of the material  terms of Mr.  Hewitt's  engagement  see
Items 1.01 and 3.02 hereof.

John G. Hewitt has more than 25 years of extensive  experience in the financial,
securities,  and brokerage fields having worked for, among others,  the New York
Stock  Exchange,  Goldman  Sachs  & Co.,  Knight  Securities,  L.P.  and  Soleil
Securities Corporation.  He has held several senior management positions and has
had experience  developing corporate strategies and marketing plans. He has been
responsible  for,  among other  things,  corporate  technology,  recruiting  and
training, finance, operations, compliance, and business planning.

SECTION 9 FINANCIAL STATEMENTS AND EXHIBITS

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(C)   EXHIBITS

ITEM NO.    DESCRIPTION
--------    -----------

10.1        Employment Agreement dated March 21, 2005 between
            Registrant and John G. Hewitt.

                                       3
SIGNATURES

      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                         A.B. WATLEY GROUP INC.

                                         By: /s/ Robert Malin
                                         ----------------------
                                             Name: Robert Malin
                                             Title: President

Date:    March 25, 2005

                                       4