U.S. securities regulators on Friday sued a partnership and one of its founders, alleging they made bogus offers to buy such well-known entities as Sony Corp. and Playboy Enterprises Inc. in an effort to manipulate their stock prices.
Theodore Roxford, through Hollingsworth, Rothwell & Roxford (HRR), publicized the offers on Internet message board postings, news releases and in at least one case a regulatory filing, the Securities and Exchange Commission alleged in a complaint filed in Manhattan federal court.
Besides Sony and Playboy, Roxford also made offers for Zapata Corp., Edgetech Services Inc. and PeopleSupport Inc., according to the complaint. The alleged scheme took place between January 2003 and April 2007, it said.
Some offers were massive. For example, in February 2003, HRR sent Sony's board an unsolicited offer to buy the company for a total purchase price of about $78 billion, it said.
Roxford's intent in making the phony public tender offers was to manipulate the price of the target company's stock, the SEC alleged. Roxford and HRR did not intend to complete the offers, and did not have the financial means to do so.
A number for Roxford's lawyer was not immediately available. A woman who answered a phone number listed on HRR's Web site said it did not belong to the firm. No one answered another number given for HRR, and no one responded to e-mails to addresses believed to belong to it.
Roxford formed HRR along with three other people in 2003, the SEC said.
Roxford's given name is Lawrence David Niren, which he changed in 1995, it said. He has used other aliases, including Theodore Vakil and Edward Pastorini, according to the complaint.
Earlier this year, Bloomberg News reported that an Edward Pastorini, who it identified as a U.S. financier, may lead a bid for Gold Fields, the world's fourth-largest gold producer. Bloomberg said the documents about the bid were sent to it by a Gold Fields executive.
Bloomberg later said the details of the report and the identity of Pastorini could not be verified. The phone number provided by the man was used in 2003 by a Florida partnership that made phony takeover bids for companies, it said.
The SEC in its complaint did not specifically link Roxford to the Gold Fields bid, and a spokesman for the regulator declined to comment.
Roxford's history as a dealmaker has raised questions before.
In 2003, Roxford told Reuters he had spent the past 23 years as a private investment banker and worked with a range of international buyout firms. However, two firms he claimed to have conducted business with declined to vouch for him when they were contacted by Reuters at the time.
The San Francisco Chronicle published a story in 1995 stating Roxford had cheated hundreds of firms out of more than $2 million by promising to set them up with investors for an advance fee and then not delivering.
Roxford, who admitted in the story to having cheated the firms, claimed in a subsequent deposition that the article was a publicity stunt to sell a book that I had written.
In 2003, he told Reuters the articles were totally untrue.