Source: Securities and Exchange Commission
Litigation Release No. 24934 / September 30, 2020
Securities and Exchange Commission v. Robert McCabe et al., No. 20-cv-04800 (E.D. Pa. filed September 30, 2020)
The Securities and Exchange Commission today announced charges against Robert McCabe and his company McCabe Properties, Inc. for perpetrating a decade-long fraudulent securities offering that harmed dozens of investors.
The SEC’s complaint alleges that, from 2010 through 2020, McCabe raised approximately $1 million from investors, including friends and family members, through fraudulent sales of investments in McCabe Properties. As alleged in the complaint, McCabe falsely represented to investors that McCabe Properties held stock in an unaffiliated pharmaceutical company, and that investors would reap significant profits as a result of this ownership. The complaint alleges that McCabe sent investors stock certificates to document their purchase of shares in McCabe Properties and misrepresented to certain investors that there was limited availability of shares for purchase. McCabe allegedly spent investor funds on personal expenses.
The SEC’s complaint, which was filed in federal court in the Eastern District of Pennsylvania, charges McCabe and McCabe Properties with violations of the antifraud provisions 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 thereunder. The SEC seeks injunctive relief, disgorgement of allegedly ill-gotten gains plus interest, and a civil penalty.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of Pennsylvania announced criminal charges against McCabe.
The SEC’s investigation was conducted by Chevon Walker and Simona Suh of the Enforcement Division’s Market Abuse Unit and by Melissa Coppola of the New York Regional Office. The investigation was supervised by Joseph G. Sansone, Chief of the Market Abuse Unit. The SEC’s litigation will be led by Ms. Walker and Ms. Suh. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Federal Bureau of Investigation.