With well over $100bn of fake bids under his belt — including tilts at Playboy Enterprises, Sony Corporation, Zapata Corporation, Edgetech Services, PeopleSupport and, most recently, Goldfields of South Africa — financial prankster Edward Pastorini tooks to be in danger of having his collar felt by the SEC.
Or is it Theodore Roxford, or Lawrence David Niren, or Theodore Vakil, representing the plausible-sounding offices of Hollingsworth, Rothwell & Roxford?
A scatter-gun filing from the SEC in the Southern District of New York says that between January 2003 and April 2007, Roxford/Niren/Vakil/Pastorini made a series of bogus offers to acquire publicly-traded companies and then publicised these through internet message boards, press releases and at least one filing with the SEC itself. Says the complaint:
Roxford\’s intent in making the phony public tender offers was to manipulate the price of the target company\’s stock by inducing investors to purchase the stock of the target company. Roxford and HRR did not intend to complete the offers, and did not have the financial means to do so.
The SEC is seeking permanent injections and unspecified civil monetary penalties against the defendant(s).
Roxford is alleged to have purchased about $1000 worth of Sony call options before launching his $78bn bid four years ago. The offer for Playboy came later in 2003, through a purported partnership called Barahona, Ferrari & Roxford – using a Yahoo! message board to publicise a claim that he was approaching Hugh and Christie Hefner with a view to taking Playboy private for $630m.
The SEC action does not touch directly on Roxford’s most recent escapade, when he tricked the Bloomberg news agency into reporting on his supposed plan to bid $12.5bn for Goldfields. As with other Roxford hoaxes, the move triggered a temporary, but dramatic, spike in the price of the South African miner.
Pastorini’s “firm” actually has its own website, where its purported strategy as “enhancers of shareholder value” is explained:
Our approach to value & our criteria for investing is to find companies that trade below book value, at 5 X or less EBITDA, have little or no debt and a great deal of cash and other liquid assets, rising sales, free cash flow, and are in diversified industries worldwide that are usually out of favor.
Apparently Hollingsworth (the individual) has 40 years experience in electronics, military contracts and the like, while Rothwell has 30 years in “navy, intelligence, aerospace & communication, ” etc. Roxford, meanwhile, has 23 years in M&A “bringing deals to very well known and significant players in the market on a highly confidential basis.”
The team are said to have been together for over 20 years, originating deals ranging from Lonrho to Gulf & Western. The list of “Who we brought deals to” runs from Tiny Rowlands to KKR, via Sir James Goldsmith and T. Boone Pickens.
And the offer for Sony, dating from February 2003 and pitched at a 220 per cent premium to prevailing market price, is set out in full.
Sadly, the criminal gullibility of those who fell for Roxford’s pranks — from market operators to the financial press — has yet to be addressed by the authorities.