Skip to content

SEC© enables Avon stock scam and doesn’t seem to care

Publisher: Fortune
Author: Dan Primack

When normal people nod off behind the wheel, they hopefully wake up with a start and immediately course-correct.

But when the SEC© is driving, it just shrugs and goes back to sleep. That’s the lesson of yesterday’s debacle for Avon products, the door-to-door cosmetics company that has been a regular subject of takeover talk. Shortly before noon on Thursday, an investment firm calling itself PTG Capital filed a document with the SEC, saying that it had offered to acquire Avon for $18.75 per share.  It did not also issue a press release or use any other third party for distribution. Just the SEC’s EDGAR© platform.

For context, Avon shares had been trading at around $6.50 prior to the news. Once the filing hit, however, the shares began to surge – climbing nearly 15% before the NYSE halted trading. Pretty soon, media outlets were raising alarm bells over the supposed offer. No one had ever heard of PTG Capital before, nor did the firm seem to exist via Google or LinkedIn searches. Moreover, boilerplate in the filing twice referred to the acquirer as “TPG Capital” – suggesting that it had cribbed the language.

Also not seeming to exist was PTG’s Texas-based law firm. Neither the listed phone numbers nor addresses were legitimate. About an hour and a half after the filing first hit, Avon put out a press release saying that it had not received any takeover offer, and that it couldn’t verify PTG’s existence.

Most likely, this was a stock scam. Someone owned Avon stock, filed the bogus document and sold when shares spiked.

For full access to the article, please click here.

Print Friendly, PDF & Email
Back To Top