Jonathan Stempel

NEW YORK (Reuters), Tuesday’s top U.S. securities regulator filed suit against the head of a defunct British company over a fraud in a bid to purchase a U.S.-based aerospace and defense firm. Textron Inc (NYSE: ) for approximately $13.8 billion

Melville ten Cate (52), and his Xcalibur Aerospace Ltd claimed that they could produce unmanned high-speed aircraft systems. However, the Securities and Exchange Commission (SEC), stated in a Manhattan federal court complaint that they were not “in any position to make any legitimate offers for Textron.”

A regulator stated that ten Cate (a U.S. citizen living in Europe then) made several overtures at Textron in nearly two-years before posting a Nov. 9, 2019, advertisement in New York Times requesting Textron shares to be purchased for $60.50, or a 56% premium.

The SEC stated that ten Cate also falsely claimed, on Xcalibur’s website, to have secured $11 billion of financing. In an interview with SEC staff, he made false statements regarding the financing and Xcalibur’s presumption to be able to close the tender offer.

Unfortunately, the defendant was not available for comment immediately. An SEC request for further information did not receive a response immediately.

Textron shares rose 15.9% in the wake of the offer. Cessna, the manufacturer of business jets Beechcraft or Cessna, dismissed it as “fictitious.” According to the Providence, Rhode Island-based firm, there were 228.9 Million shares.

Tuesday’s suit seeks to impose civil penalties, restrict securities transactions and provide other remedies for ten Cate. The SEC stated that Xcalibur was placed into liquidation by a British court in July.