July 3, 2007
SEC Alleges Phony Tender Offer Scheme
On June 29, the SEC filed a civil injunctive action in the U.S. District Court for the Southern District of New York against Theodore Roxford (a/k/a Lawrence David Niren) and the partnership Hollingsworth, Rothwell & Roxford (HRR). The Commission's complaint alleges that, beginning in January 2003, Roxford and HRR made a series of bogus offers to acquire publicly-traded companies for the purpose of manipulating the price of the companies' stock. The Commission is seeking permanent injunctions and civil monetary penalties for the defendants' violations of the tender offer and market manipulation provisions of the federal securities laws. Specificallly, the SEC alleges that Roxford made false and materially misleading statements in connection with purported tender offer announcements for five publicly-traded companies - Sony Corporation, Zapata Corporation, Edgetech Services, Inc., Playboy Enterprises, Inc., and PeopleSupport, Inc. and made misrepresentations to the public regarding the existence of financial backers or banks that supposedly were interested in financing the tender offers. Roxford and HRR publicized the phony offers through press releases, internet message board postings, and in at least one filing with the Commission.
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