SEC Charges CBA Pharma and Two Executives with Fraud

SEC Litigation Releases

Filed February 5th, 2026

Detected February 11th, 2026

Summary

The SEC has charged CBA Pharma, Inc. and two executives with defrauding investors in a securities offering that raised approximately $4.1 million. The company allegedly misrepresented the effectiveness and FDA approval status of its cancer drug, CBT-1.

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The Securities and Exchange Commission (SEC) has filed charges against Kentucky-based biopharmaceutical company CBA Pharma, Inc., its president Wayne Michael Putnam, and vice president of capital markets Louis Carmichael. The SEC alleges that from April 2023 to February 2024, the defendants conducted a fraudulent securities offering, raising approximately $4.1 million from about 160 investors. The complaint states that CBA Pharma misrepresented its drug CBT-1 as effective in treating cancer and nearing FDA approval, when in reality, the FDA had informed the company that the drug application lacked efficacy evidence and had been withdrawn.

The SEC is seeking permanent injunctions, disgorgement, pre-judgment interest, and civil penalties against CBA Pharma, Putnam, and Carmichael. The charges include violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. This enforcement action highlights the SEC's focus on combating investment fraud within the pharmaceutical sector and serves as a warning to companies regarding accurate disclosures about drug development and regulatory status.

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CBA Pharma, Inc., Wayne Michael Putnam, Louis A. Carmichael

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26479 / February 6, 2026

Securities and Exchange Commission v. CBA Pharma, Inc., et al., No. 26-cv-00042 (E.D. Ky. filed Feb. 5, 2026)

SEC Charges Kentucky-Based Biopharmaceutical Company and Two Executives with Defrauding Investors

On February 5, 2026, the Securities and Exchange Commission filed charges against CBA Pharma, Inc., a private Kentucky-based biopharmaceutical company; Wayne Michael Putnam, its president; and Louis “Buzz” Carmichael, its vice president of capital markets, for allegedly conducting a fraudulent securities offering which raised approximately $4.1 million from approximately 160 investors.

The SEC’s complaint alleges that from April 2023 to February 2024, CBA Pharma, through Putnam and Carmichael, misrepresented to investors that CBA Pharma’s lone drug, CBT-1, was effective in treating cancer by preventing multidrug resistance to cancer treatments, such as chemotherapy, and was in the final stages of obtaining approval from the United States Food and Drug Administration (“FDA”). According to the complaint, however, CBT-1 was never close to FDA approval, the FDA had informed the company that its drug application for CBT-1 lacked evidence of efficacy, and, by April 2023, the FDA told the company that it had withdrawn CBA Pharma’s drug application for CBT-1.

The SEC’s complaint, filed in the District Court for the Eastern District of Kentucky, charges CBA Pharma, Putnam, and Carmichael with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b‑5 thereunder. The SEC seeks a permanent injunction, disgorgement, pre-judgment interest, and a civil penalty as to CBA Pharma and permanent injunctions, civil penalties, and bars from participating in any issuance, purchase, offer or sale of any security, except for certain transactions within personal accounts as to Putnam and Carmichael.

The SEC’s investigation was conducted by Tracy W. Lo and Nicholas Magena and was supervised by Steven L. Klawans of the SEC’s Chicago Regional Office. The SEC’s litigation will be led by Eric Phillips and Timothy Stockwell of the Chicago Regional Office.

The SEC appreciates the assistance of the U.S. Attorney's Office for the Eastern District of Kentucky, the Federal Bureau of Investigation's Louisville Field Office and the FDA.