SEC Sends Enforcement Action Notice to Interception Firm Ability
The notice is the result of an anti-fraud violation investigation that has been ongoing since 2017 and pertains to Ability's 2015 merger with shelf company Cambridge
The U.S. Securities and Exchange Commission (SEC) has issued wells notices to Nadsaq and Tel Aviv-listed interception company Ability Inc. and two of its officers and controlling shareholders, according to a Wednesday SEC filing. The wells notices—notifications of the SEC’s intention to bring an enforcement action against all parties involved—are the result of an anti-fraud violation investigation that has been ongoing since 2017 and pertains to Ability's 2015 merger with shelf company Cambridge Capital Acquisition Corporation.
For daily updates, subscribe to our newsletter by clicking here.Tel Aviv-based Ability provides interception, geolocation, and cyber intelligence products to security agencies.
SEC's Washington headquarters. Photo: Bloomberg
On Tuesday, the SEC filed a civil complaint in the district court for the Southern District of New York against Ability and subsidiary Ability Computer & Software Industries Ltd., as well as against CEO Anatoly Hurgin and chief technology officer Alexander Aurovsky. In the complaint, the SEC alleges that both men lied to Cambridge’s shareholders about the company’s market potential, its products, and its customers, in order to convince them to approve the merger with Ability.
The SEC further alleges that Hurgin and Aurovsky made $9 million off the merger and $6 million-worth of options, while Cambridge’s shareholders lost $60 million.
According to Wednesday’s filing, Hurgin and Aurovsky were in the final stages of reaching a settlement prior to Tuesday’s filing.
Ability was down 5.71% on Friday, closing at $0.919 per share. Following the merger, the company listed on Nasdaq at $100 per share.