As we reported earlier, it appears that Avon Products (AVP) shareholders today got scammed by a fraudulent takeover offer that somehow was published via the Securities and Exchange Commission’s website.
Not only has Avon said that it never received a buyout bid, but neither the purported buyer nor its law firm appear to exist. Whoever filed the document, however, likely made out well given that Avon stock spiked nearly 15% on the “news” before sinking back down.
But here’s the thing: Avon stock remains up around 5.55% on the day. Perhaps there are all sorts of legitimate reasons for that, such as traders betting that today’s con will remind legitimate buyers that Avon is a takeover candidate. Or maybe, just maybe, some folks are still being suckered because the offer letter remains on the SEC’s website.
That’s right: An obviously-fraudulent document remains posted on the website of America’s top financial regulator, thus giving it a de facto seal of approval.
We don’t yet have any idea how the document got into the SEC’s EDGAR system in the first place — or if it was required to use any sort of Avon-specific passwords — but do know that everyone by now has concluded that it shouldn’t be there.
I’ve asked the SEC to explain why it hasn’t pulled the document but, so far, the agency has declined to comment. A spokeswoman also refused to explain the SEC’s process for removing already-published documents, although there is a note on the SEC’s EDGAR information page saying that in “very rare and unusual circumstances,” registrants may contact the SEC in writing to have a filing deleted. It is unclear if Avon has done so in this case, per a company spokeswoman.
Update: At 7:15pm, an SEC spokesman sent over the following statement:
Under the federal securities laws, filers are responsible for the truthfulness of their filings, and they are subject to enforcement actions when they are false or misleading. The SEC receives about 4,000 EDGAR filings daily, which are automatically available to the public and involve more than 300,000 individual and 28,000 company and mutual fund filers.
We have followed up to ask why, in this particular case, the document remains online when it has been so widely debunked. If we receive a reply, we’ll post it here. As of this writing, the document has been online for approximately 10 hours.
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