The US Securities and Exchange Commission (SEC) has identified the culprit of a fake takeover bid for global direct sales giant, Avon.
The SEC filed a lawsuit yesterday alleging that 37-year-old Nedko Nedev launched a fraudulent takeover offer for Avon via a false agency called PTG Capital Partners Ltd, a London-based internet provider and a notary in California.
The takeover offer was registered through the public securities system EDGAR. As a result of the 200 percent premium offered for the company on May 14, Avon’s shares rocketed 20 percent, netting Nedev US$5,000, before the cosmetics company issued a statement denying the existence of any deal.
Nedev is also thought to be behind two similar attempts to manipulate the stock market, launching bogus takeover bids for Rocky Mountain Chocolate and Tower Group International over a period of three years. “Even when traders attempt to hide behind proxy servers, false filings and phony foreign entities, we are able to quickly identify patterns and relationships to focus our investigation and identify who is behind the manipulative trading,” said Daniel Hawke, head of the SEC’s market abuse unit.
The case has prompted calls for further background checks on those who submit filings to EDGAR.