SEC Charges CBA Pharma and Two Executives with Fraud

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when in reality, the FDA had informed the company that the drug application lacked efficacy evidence and had been withdrawn.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.