The takeover bid that was never real
A takeover bid is the most price-sensitive statement a stranger can make about a listed company, which makes it cheap to counterfeit. In the SEC's records the fakes travel by different routes: EDGAR filings, wire press releases and, once, a New York Times advertisement. What they share is a bid with no means or intent behind it.
In November 2020 an advertisement in The New York Times announced an offer to buy every share of Textron, a company with a market value above $10 billion, at $60.50 each. The SEC’s complaint alleges the offer’s author had no means to pay for it, and that the advertisement claimed $11 billion in financing for a purchase that needed more than $14 billion. It also says Textron’s price rose about 15 per cent that day and that the NYSE halted trading.
An offer to buy a company is the most price-sensitive public statement a stranger can make about it. It carries its own premium, so a reader does not need to be persuaded that the stock is worth more. That is also why the statement is cheap to forge. This post reads the SEC’s records of counterfeit bids to see what a forger needs and how the forgeries reach the public. The technique page covers the law in full.
Seven schemes, three routes
The library tags 13 records sham-tender-offers, as of 2026-09-20. They describe seven schemes, some followed through
several releases.
A filing on EDGAR. The SEC’s own database is the system of record, and the filings look official. In the Fitbit matter, a fake tender offer was filed in the name of ABM Capital LTD, a company the SEC calls nonexistent (Murray, Burns). In the Integrated Device Technology matter, a court found that a Schedule 13D attached a $32-a-share offer letter and a draft merger agreement naming two entities that did not exist, and that an expert concluded the option holdings it reported for one co-holder were false (Aly). The SEC’s Avon allegations rest on a false tender-offer filing made in the name of a fictitious entity (PTG Capital Partners). This is the territory of EDGAR filing fraud.
A wire press release. In the Allied Nevada matter, a self-described investment banker sent a letter to management one evening and issued a press release at 6 the next morning announcing that a Chinese mining company had “commenced” a cash tender offer (Chang). The BlueLinx and Veritone bids both used press releases and filings together (Simmons, Radjabli). The Tower Group episode in the PTG case used a press release in place of a filing. See fake press releases.
A newspaper advertisement. Textron is the one case that used neither. The complaint alleges the advertisement, with a copy on the bidder’s website, and an attempt to file on EDGAR that SEC staff prevented (ten Cate).
The point of the comparison is that the channel is interchangeable. What stays constant is the bid. That is why the library files these matters under a technique of their own, not under whichever channel was used.
Why the counterfeit is so cheap
A real bid has real costs: financing, advisers, a filing history. The reader cannot see any of these. In these records the bid’s authority came from a few cheap signals.
The first is the form. A Schedule 13D or Schedule TO-C looks like the paperwork of a serious acquirer. The Veritone complaint says the defendant believed reporting a 5 per cent stake would make the offer look more legitimate, and alleges that the stake was really about 4.6 per cent.
The second is a financing claim that cannot be checked at the moment of publication. The Veritone manager is alleged to have had less than $3 million under his control against a roughly $200 million offer. The complaint in the BlueLinx matter puts the cost of buying 35 per cent at about $80 million.
The third is a second announcement. Simmons is alleged to have issued a press release “confirming” the bid after his first one had not let him sell his options, and to have filed documents suggesting he had funds. Confirmation from the same person does not confirm anything, but the market reacted again.
What the counterfeit earned
Apart from one case, the profit was a small fraction of the sums the bids claimed. The Fitbit traders sold call options for about $3,100 and about $13,000. The SEC alleged about $5,000 in excess profit on the Avon trades. The IDT options were sold for a profit of more than $425,000, within minutes of trading resuming after a halt. The exception is Allied Nevada, where the complaint alleges over $7 million.
The timeline shows why the window is short. In the Veritone matter, the stock opened 41.4 per cent higher and closed lower the same day, and the complaint says the manager sold over 80 per cent of the position within two days.
The sale and the withdrawal are separated by days. In this matter the withdrawal was filed only after the selling, and in the Fitbit release the price rise is called temporary.
How the cases ended
The outcomes differ, and the record should be read case by case.
- Fitbit. Murray pleaded guilty in a parallel criminal case and was sentenced to two years in prison, according to the SEC’s 2018 release. The SEC’s release says he agreed to settle its charges. Burns consented, without admitting or denying, to a judgment with $13,886 of disgorgement and interest and a $60,000 penalty.
- IDT. A court granted the SEC summary judgment on liability in March 2018. Remedies were still to be briefed when the SEC issued its release.
- Allied Nevada. Chang and Everbright settled without admitting or denying. The judgment ordered $2,890,507 of disgorgement, $94,569 of interest and a civil penalty of $2,890,507 against Chang.
- PTG, Avon, Tower and Rocky Mountain Chocolate. In 2020 two trading entities settled without admitting or denying, for combined civil penalties of $1,000,000 plus about $31,270 of disgorgement and interest. A default judgment against Nedko Nedev carried a $470,000 civil penalty. The SEC dismissed two other defendants as fictitious entities.
- Veritone. A proposed settlement, subject to court approval when announced, would have Radjabli pay $600,000 in all: $162,800 of disgorgement, $17,870 of interest and $419,330 of penalties, with Apis Capital and Loan Doctor jointly and severally liable.
- Textron. A consent judgment in January 2023 imposed a $500,000 penalty and injunctions, and barred ten Cate from serving as an officer or director of a public company. The SEC alleged no trading profit.
- BlueLinx. Filed in August 2022. The release records no outcome, and the library holds none.
What the record does not show
The argument needs care. Seven schemes between 2012 and 2020, announced by one regulator, say nothing about how often bids are counterfeited or how many go undetected. Channels may simply be those the SEC could trace. And the Textron matter shows the boundary of the trading story: nothing in the complaint alleges that ten Cate traded, yet the same charging provisions were used. The conduct on the SEC’s theory is the announcement itself.
Two other cautions. Rule 14e-8, the provision written for this conduct, turns on intent and means at the time of the announcement, so a real bid that later fails is not a sham. And a lawful mini-tender offer, for no more than 5 per cent of a company, can look like a bid without being a counterfeit: the offer is real, though its price may be below the market.
What the records support is narrow but consistent. Counterfeiting a bid takes a bidder’s name, a credible channel and a financing claim nobody can check in the first minutes. The technique page sets out how each of those can be checked.