Skip to main content

SEC Settles Charges Against Former CEO of a Special Purpose Acquisition Company

June 20, 2019

ADMINISTRATIVE PROCEEDING
File No. 3-19210

June 20, 2019 - The Securities and Exchange Commission filed today settled administrative charges against Benjamin H. Gordon of Palm Beach, Florida, the former CEO of a Florida-based Special Purpose Acquisition Company, or "SPAC," related to the SPAC's merger with an Israel-based intelligence communications company. SPACs are companies formed specifically to acquire a yet-to-be identified company and usually raise capital for the acquisition through an initial public offering.

According to the SEC's order, the SPAC, Cambridge Capital Acquisition Corporation, merged with Ability Computer & Software Industries, Ltd. in December 2015 after Cambridge shareholders voted to approve the merger. The order finds that Gordon negligently failed to take reasonable steps and conduct appropriate due diligence to ensure that Cambridge shareholders voting on the merger were provided with material and accurate information concerning Ability's business prospects, including Ability's purported ownership of a new, game-changing cellular interception product, ULIN, Ability's so-called backlog of orders from its largest customer, a police agency in Latin America, Ability's lack of actual purchase orders backing its backlog, and Ability's pipeline of possible future orders from customers.

Without admitting or denying the findings, Gordon agreed to a cease-and-desist order, which finds that he willfully violated Section 17(a)(2) of the Securities Act of 1933, which prohibits persons from obtaining money or property by means of any untrue statement of a material fact, and Section 14(a) of the Securities Exchange Act of 1934 and Rule 14a-9 thereunder, which prohibit making materially false or misleading statements or omissions in connection with the solicitation of a proxy. The SEC's order requires Gordon to pay a $100,000 civil penalty, imposes a cease-and-desist order, and imposes a 12-month associational, penny stock, and investment company suspension.

The SEC's investigation was conducted by Jennifer T. Calabrese and supervised by Ansu N. Banerjee and John W. Berry of the Los Angeles Regional Office.

Return to Top