RPR&C In The Media


The Street- Avon Says Private-Equity Bid a Hoax; Here’s the SEC Filing-quote by Jerry Reisman

May 15, 2015 Posted in: RPR&C In The Media

Avon Says Private­Equity Bid a Hoax; Here’s the SEC Filing
By James Langford | 05/14/15 ­ 02:35 PM EDT

NEW YORK (TheStreet) ­­ Avon (AVP) says a private­ equity bid that pushed up its stock on Thursday is a hoax: Not only has the beauty ­products maker received no offer, it hasn’t been able to confirm the purported buyer’s existence. Shares of Avon jumped about 7% after the filing outlined a bid from a London ­based private­ equity firm of $18.75 per share,which would be almost three times yesterday’s closing price of $6.67. Calls to the firm, PTG Capital Partners, weren’t answered. Avon “has not received any offer or other communication from such an entity,” the company said in a statement on its website. Michael Trose, a contact identified in the filing as a Fort Worth, Texas, attorney, is unknown to the State Bar of Texas, which all the state’s attorneys are required by law to join. His supposed employer, the Trose & Cox law firm, doesn’t exist, according to Bloomberg. How the document was filed with the Securities and Exchange Commission wasn’t immediately clear, and an agency spokeswoman,Judith Burns, declined to comment on it.

Some electronic safeguards, however, are detailed on the agency’s Division of Corporation Finance website. People or organizations who submit electronic filings to the SEC use five codes to log in to the agency’s system, according to that site, which warns that not safeguarding the codes can lead to unauthorized filings. The process is mostly automated, the agency said, and Corporation Finance staff rarely get involved except to help with filing glitches or protect the integrity of the database.

While the false filing violates a number of securities laws, it’s also cyber crime no different than the hacking of Sony, said Jerry Reisman, a partner in the firm of Reisman Peirez Reisman & Capobianco in Garden City, N.Y. “We’re all under a terrible threat today because of the Internet, especially the market,” Reisman said. “The stock market reacts to the news, not only immediately, but even on speculation that news is going to occur. Trades can be done in seconds, anywhere in the world, merely by pushing a couple of buttons on your keypad.”

Reisman recommends an international agreement outlawing such incidents and making culprits subject to extradition. Otherwise, “these are gyrations that are going to occur more and more often,” he said. “Everybody gets hurt. The larger investor gets hurt for money, and the smaller investor gets killed.”