U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20179 / July 2, 2007
SEC v. Theodore Roxford a/k/a Lawrence David Niren and Hollingsworth, Rothwell & Roxford, Civil Action No. 07-CV-6146 (S.D.N.Y.)
SEC Charges Theodore Roxford a/k/a Lawrence David Niren and Hollingsworth, Rothwell & Roxford With Tender Offer Fraud and Market Manipulation
Commission Seeks Permanent Injunction and Monetary Penalties
On June 29, 2007, the Securities and Exchange Commission ("Commission"), 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, a partnership that Roxford formed, 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.
The Commission alleges in its complaint that beginning in 2003, Roxford, in some instances through the entity HRR, 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. In connection with these phony offers, Roxford, and in some cases HRR, made misrepresentations to the public regarding the existence of financial backers or banks that supposedly were interested in financing the tender offers, even though they did not have any financial backing nor independent means of financing the acquisitions. Roxford and HRR publicized the phony offers through press releases, internet message board postings, and in at least one filing with the Commission. They made these fake offers in order to manipulate the price of the target companies' stock by inducing investors to purchase the stock.
The Commission's complaint seeks to permanently enjoin Roxford and HRR from violating Sections 9(a) and 14(e) of the Exchange Act and Rule 14e-8 promulgated thereunder, and the imposition of civil monetary penalties.