Gold Fields Bidder Takes Twisted Path From Shelter to Argentina

By David Dietz, David Glovin and Christopher Donville
Bloomberg.com
August 31, 2007

For an itinerant who has lived in a homeless shelter and traveled on Greyhound buses, Lawrence Niren thinks big.

He's made bids for companies such as Sony Corp., the world's second-largest maker of consumer electronics, and Playboy Enterprises Inc., publisher of the most widely read men's magazine. Niren's deals fizzle when he fails to name backers, yet that doesn't stop him. He pops up again to target new prey under a variety of aliases.

``I am an unbelievable liar,'' Niren said in a note filed as an exhibit in a 1992 divorce. ``I fool everyone because I am such a good actor that I sometimes am even able to fool myself.''

His game may be coming to an end. The U.S. Securities and Exchange Commission on June 29 sued Niren for fraud for buying shares or stock options of five companies and then announcing phony takeovers to drive up prices, according to a complaint filed in U.S. District Court in New York. The SEC told Niren he's also under criminal investigation by federal prosecutors, he said in court papers. Niren says he's preparing his defense in Argentina, where he has a home, a fiancee and cats.

The case of Niren, who devoured Franz Kafka literature and Beatles music in his youth, shows how someone with a lot of guile and a bit of information can roil markets in the Internet age. He used e-mail and online message boards to broadcast takeover bids of little substance to investors around the world, court records and interviews show.

Many Identities

The Internet, with its reach and anonymity, provides the ideal environment for con artists, said Mark Rasch, who oversaw computer crime investigations at the U.S. Justice Department from 1983 to 1991. It's easier for someone on the Web to appear legitimate, evade regulators and attract wide audiences, he said.

``There are tens of thousands of people who have the ability to do this,'' said Rasch, a lawyer in Washington who now works at FTI Consulting Inc., which advises businesses on security issues. ``Enforcement is relatively random.''

Companies that have been targeted by Niren typically haven't known him by that name. He has used multiple aliases, including Theodore Roxford, Theodore Vakil and Edward Pastorini, in his phony takeover bids, the SEC suit says. Pastorini is actually a New Jersey musician who's known Niren since at least the 1970s. Niren has also identified him as a step-cousin.

In April, a man identifying himself as Pastorini said he sent a document to as many as 20 mining companies encouraging them to join a bid for Johannesburg-based Gold Fields Ltd., the world's fourth-largest gold producer. The phone number on the document was one Niren uses.

Gold Fields

Gold Fields shares rose as much as 11 percent on April 11 after Bloomberg News reported the apparent offer, basing the story on documents provided by a Gold Fields executive on the condition of anonymity. The stock gain vanished after a blog published by the Financial Times questioned Pastorini's credentials because Google and Factiva searches didn't yield anyone with his profile.

South Africa's Financial Services Board is investigating trading in Gold Fields shares. The company isn't mentioned in the SEC complaint.

U.S. District Court Judge Kevin Castel last week denied Niren's request that a Sept. 7 court meeting in New York be adjourned or that he be allowed to participate by phone from Argentina.

Wedding Bells

In his motion, Niren said he's afraid he'll be arrested on criminal charges if he travels to the U.S. He said his written response, which was due by Aug. 30, will ask for the SEC's complaint to be dismissed. Rebekah Carmichael, a spokeswoman for U.S. Attorney Michael Garcia in Manhattan, said she can't confirm or deny the existence of a criminal investigation.

Niren will get married in early September, and it would be an ``extreme burden'' for him to leave his wedding and honeymoon to travel to New York for the hearing, according to an affidavit by someone who identified herself as the bride's cousin, Maria Barahona. Barahona said she's from an Argentine family of ``significant investors'' who have worked with Niren on some of his bids.

Niren wouldn't comment on July 31 when he returned a call made to his California phone number. In ensuing calls, he offered an interview with himself and Pastorini in his attorney's office in Argentina, provided some of his legal fees were paid. He also threatened to sue Bloomberg if reporters kept contacting his friends and family members and those of Pastorini.

`I am Elvis'

In an Aug. 8 e-mail, Niren said his clients included ``tons of mining companies, leverage buyout firms and raiders.'' He said he could produce ``wires and checks and contracts and letters from dozens of former clients.''

``You want the whole truth, then pay for it,'' he wrote.

Later he sent another e-mail mocking media reports about him and the SEC complaint: ``I am Theodore Roxford, I am Lawrence Niren, I am Elvis, I am Edward Pastorini, I am Spartacus, I am Humpty Dumpty, I am Theodore Vakil. And the hits just keep on coming.''

Niren changed his name to Roxford in 1995, according to a California court filing. He now says he prefers using Niren.

The real Pastorini, a member of the rock band 101 Crustaceans, didn't reply to phone messages and e-mails, or to messages left at his home in Dunellen, New Jersey. He knew Niren in Boston in the 1970s, according to his wife, Nicole McElvery. She said at the end of July that she'd separated from Pastorini and she didn't know where he was. The SEC suit doesn't allege Pastorini was involved in Niren's schemes.

Loss on Sony

For at least a decade, Niren, who often wears his hair in a ponytail, has floated takeover offers that lifted stock prices and then went nowhere. The SEC calls five of the bids ``bogus.''

In February 2003, Niren sent a letter to then Sony Chairman Nobuyuki Idei offering to purchase all of the company's shares for $78 billion. Ten months later he offered to buy Chicago-based Playboy for $630 million in a plan to take it private.

According to the SEC, his company lost $32,000 on Sony call options it failed to exercise before they expired. Niren filed a fraud suit against Tokyo-based Sony in federal court in Florida after it ignored his bid. The case was dismissed.

In 2003, the SEC began probing Niren's Melbourne, Florida- based firm, Hollingsworth, Rothwell & Roxford, for ``possible violations'' of securities laws in connection with spurious offers for Sony and U.S. companies including fish harvester Zapata Corp., court documents show.

SEC spokesman John Nester declined to comment on why the SEC didn't sue Niren until 2007.

Hubris and Deceit

John Reed Stark, the SEC's chief of Internet security, said the agency makes an effort to target recidivists and technology- savvy con men, whose identities can be traced through electronic fingerprints. The SEC brought 525 Internet-related enforcement cases from 1995 to 2006, said Stark, who isn't involved in the Niren case.

The life of Lawrence David Niren, which has wound through courts in at least five states, cities around the globe and a bankruptcy filing, is a study in hubris and deceit, according to court records. He concocts deals while jumping from a trailer park to a homeless shelter to hotel rooms costing $38 a night in San Francisco's crime-ridden Tenderloin neighborhood, using mail drops for addresses.

He's also tried his hand at music and writing. Niren circulated fliers to form a Beatles-influenced band in Boston during the 1970s, said Brian Catanzaro, who played in the group. Niren said in court filings in 2005 that he was working on a novel about ``the life of Jesus in modern times.''

Kafka and the Beatles

Niren was born in 1953, and lived in the city of Cote Saint-Luc next to Montreal. His late father, Herbert, ran the family travel business, family members said.

His grandfather, Aaron Nirenberg, arrived in Canada in 1912 and as a travel agent helped Jews flee pre-World War II Europe, according to ``Who's Who in Canadian Jewry'' and family members.

Niren's rambling lifestyle started in his formative years. He moved to Florida with his mother after his parents divorced when he was about 5, and then was sent back to Canada to live with his father, older sister Wally Burick said.

His stepmother, Ethel Niren, said he gravitated to books -- especially by Kafka, author of ``The Metamorphosis'' -- and played the piano a lot. He dropped out of high school, according to his divorce papers.

Greyhound Bus Romance

Niren fell out with his father, and it was his uncle, Edgar Rothschild, who schooled him in investing, Ethel Niren said. Niren would later say Edgar, who is now deceased, had a distant link to the Rothschild banking dynasty. A spokesman for the Rothschild family, Rupert Trefgarne, said there was no relation.

``Eddie Rothschild was the one who taught him everything,'' Ethel Niren said.

Niren met his first wife, Katherina, on a Greyhound bus in 1979. She embroidered the names of his favorite stocks -- including Driefontein Ltd., which would evolve into Gold Fields - - on a pillow, said a person who knew Niren and asked not to be identified because he has cut ties with the investor.

In May 1985, Niren went to work for Martin Armstrong, who is serving a five-year prison sentence for defrauding investors, at Armstrong Equity Management Inc. in Princeton, New Jersey. Armstrong said in a July interview that Niren appeared to be diligent and smart at first.

A year later, Armstrong sued Niren for $550,000 because he allegedly stole files. Niren counter-sued, saying Armstrong took kickbacks on trades executed by a friendly broker. The case was settled in 1986.

Martin Armstrong

``Lawrence was going through my Rolodex and telling people I had recommended some stock, which I never did,'' Armstrong said from prison in New Jersey. ``He was trying to help his uncle manipulate some stocks in Canada,'' he said in the interview.

Niren filed for bankruptcy in 1986, two months after Katherina gave birth to their only child, Arthur Theodore Niren, in the Florida resort town of Lauderdale-by-the-Sea. Niren listed debts of $1.5 million. He owed $300,000 to Katherina's relatives in Germany and was living on $214 a week in unemployment benefits.

The couple became nomadic, moving 17 times in 13 years of marriage, according to divorce papers filed in 1990 by Katherina, a waitress and receptionist who grew up in Paris.

There were also successes. Records from Niren's divorce indicate that companies controlled by billionaire Boone Pickens paid Niren $250,000 in 1987. That year, Niren suggested that Vancouver-based Cornucopia Resources Ltd. participate in what turned out to be Pickens's unsuccessful $6.3 billion bid for Newmont Mining Corp. in Denver, said Andrew Milligan, who was Cornucopia's president at the time.

Nomadic Existence

``Lawrence had imagination and just sheer gall,'' Milligan, now chairman of ValGold Resources Ltd. in Vancouver, said in an interview. He said he profited from Niren's advice, although he didn't pursue Newmont with Pickens.

Pickens, now 79, doesn't remember getting Niren's advice, said Michael Boswell, vice-president of Mesa Power LP, an affiliate of Pickens's BP Capital LLC. ``I think he was paid a fee as a finder,'' he said.

Niren's marriage to Katherina collapsed before Arthur's sixth birthday. The couple divorced in 1992 after squabbling in court over visitation rights and child support payments. She submitted a tally that he earned $315,000 in 1987.

``My husband has demonstrated the ability to earn a significant annual income,'' she said in her divorce filings. Katherina didn't respond to messages left at her home in San Rafael, California.

Married Twice More

Niren was married twice more, from 1992 to 1995 to waitress Natalia Chanetskaia, and for 10 months in 1997 to Ellina Yurovskaya, according to divorce papers.

When in the U.S. in recent years, Niren has stayed in the San Francisco Bay Area, to be near his son.

Niren listed his address as the South Beach Homeless Center, three blocks from San Francisco Bay, in January 2001 court papers demanding Greyhound Lines Inc. pay him $250 for losing a bag.

In June of this year, he took a room at the Gateway Inn, across the street from a massage parlor in San Francisco's Tenderloin, registering as Roxford, said a clerk who declined to give her name. Rooms at the hotel typically rent for $270 a week.

Niren suggests he has powerful allies. His lawsuit against Sony included e-mails of support that appeared to come from David Bonderman, who heads TPG Inc., a U.S. buyout firm that manages more than $30 billion.

``Hopefully, these meetings you have set up will work out,'' read an e-mail dated Feb. 12, 2003. ``We will watch with interest.''

Claiming KKR Link

Niren said he also trolled for possible backing at Kohlberg Kravis Roberts & Co., a buyout firm whose funds control companies with more than $100 billion in annual revenue.

TPG spokesman Owen Blicksilver and KKR spokeswoman Molly Morse declined to comment.

Niren told the SEC to contact him through a post office box in Mendoza, a city in Argentina's wine country. It's situated at the foot of the Andes Mountains, 683 miles west of Buenos Aires.

In June, he rented the box about five blocks from the town's Sarmiento pedestrian street, known for sidewalk cafes and shopping. He said he was expecting a U.S. passport, according to an employee who recognized his photo. On Aug. 9, Niren demanded the return of the 90-peso ($28) rental fee, saying the post office had rejected his parcel, the worker, who wouldn't give his name, said.

`Me and My Monkey'

In April, Niren asked employees at Mendoza's Aconcagua Hotel, named after the tallest mountain in the Americas, to let him receive calls while he waited for lodging to be arranged, according to desk clerks who recognized his photo.

He had dyed his long hair platinum blond and wore John Lennon-style glasses, they said.

Niren regards Lennon reverently, friends and relatives say. In 1990, he used the words of a Lennon song in a note Katherina, his ex-wife, had filed in their divorce case.

``You may wonder: If I've loved you, how could I have lied to you about things?'' he wrote. ``Like the song says, `Everybody's Got Something to Hide Except For Me and My Monkey.'''

[ RGM Short Selling Home page ]