U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20487 / March 11, 2008
SEC v. Theodore Roxford a/k/a Lawrence David Niren and Hollingsworth, Rothwell and Roxford, Civil Action No. 07-CV-6146 (S.D.N.Y. filed June 29, 2007)
SEC Obtains Judgments Against Theodore Roxford and Hollingsworth, Rothwell & Roxford For Tender Offer Fraud and Market Manipulation
On March 3, 2008, in a civil action previously filed by the Securities and Exchange Commission ("Commission"), Judge P. Kevin Castel of the United States District Court for the Southern District of New York entered a judgment permanently restraining and enjoining the partnership Hollingsworth, Rothwell & Roxford ("HRR") from future violations of the anti-manipulation and tender offer anti-fraud provisions of the federal securities laws, Sections 9(a) and 14(e) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 14e-8 thereunder. HRR was ordered to pay $900,000 in civil monetary penalties, pursuant to Section 21(d)(3) of the Exchange Act. On March 7, 2008, in the same matter, Judge Castel also entered a judgment permanently restraining and enjoining Theodore Roxford a/k/a Lawrence David Niren ("Roxford") from future violations of Exchange Act Sections 9(a) and 14(e), and Rule 14e-8 thereunder. Roxford was also ordered to pay $900,000 in civil monetary penalties. Both judgments were entered by default.
The Commission's Complaint alleged that beginning in 2003, Roxford, in some instances through the partnership 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 Roxford and HRR 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.
With judgments entered against all of the defendants, this concludes the Commission's action in this matter.