SEC v. Melville Peter ten Cate, No. 1:22-cv-02787, Southern District of New York (Jan. 3, 2023) — Complaint

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

22-cv-2787

COMPLAINT

JURY TRIAL DEMANDED

Plaintiff Securities and Exchange Commission (the “Commission” or “SEC”) files this
Complaint against Melville Peter ten Cate and alleges as follows:
SUMMARY
1. Melville Peter ten Cate (“ten Cate” or “Defendant”) and his now defunct private
company Xcalibur Aerospace, Ltd. (“Xcalibur”) knowingly or recklessly made a false and
financially unviable tender offer for Textron, Inc. (“Textron”), a New York Stock Exchange-listed
aircraft, defense and industrial company with a market capitalization of more than $10 billion.  Ten
Cate was the sole principal and officer of Xcalibur, which purported to be a United Kingdom-
based “aerospace and defence company specializing in the development and manufacturing of high
speed unmanned aircraft systems.”  As ten Cate knew or was reckless in not knowing, Xcalibur
had negligible, if any, assets, operations and revenue, and was never positioned to make any
legitimate offer for Textron.
2. Notwithstanding this reality, on Monday, November 9, 2020, ten Cate placed a New
York Times advertisement announcing Xcalibur’s offer, set to expire on December 11, 2020, to
purchase all outstanding shares of Textron common stock for $60.50, an approximately 56%

SECURITIES AND EXCHANGE
COMMISSION,

Plaintiff,

v.

MELVILLE PETER TEN CATE,

Defendant.

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premium over the stock’s previous closing price.  The transaction would have required more than
$14 billion to complete.  Ten Cate falsely stated in the advertisement that Xcalibur had secured
$11 billion in financing to complete the offer.  Ten Cate also directed a similar announcement to
appear on Xcalibur’s public website.
3. The November 2020 public announcement followed Defendant’s previous non-
public overtures to acquire Textron.  Ten Cate first approached Textron via email on January 4,
2019, attaching a purported tender offer by Xcalibur to purchase Textron’s outstanding common
stock for $66 per share.  Following a brief exchange, ten Cate provided what purported to be
Xcalibur’s financial statements to Textron.  At the time, Textron’s CEO sent an email to ten Cate
stating that Textron was not interested in pursuing Xcalibur’s offer.  A little over a year later, on
February 28, 2020, ten Cate sent another email to Textron’s CEO, again with Xcalibur’s purported
financial information, stating that he was authorized to “suggest a cash transaction at $60 per
share.”  Textron did not respond to the offer.
4. The November 2020 tender offer announcement was materially false and
misleading because, among other things, it failed to disclose that ten Cate and Xcalibur were
incapable of completing the tender offer as they lacked the financial means to do so, that ten Cate
and entities he controlled had been the subject of multiple bankruptcy and default judgments, and
that Textron had previously rejected Xcalibur’s offers to acquire or merge with Textron.  Ten Cate
knew or was reckless in not knowing each of these facts.
5. After the announcement of Xcalibur’s fraudulent tender offer, Textron’s common
stock price rose approximately 15% before market close on November 9.  Its trading volume was
approximately 450% higher than during the prior trading day, causing the New York Stock
Exchange (“NYSE”) to halt trading in Textron’s shares.
6. By engaging in the conduct described in this Complaint, Defendant violated, and

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unless enjoined will continue to violate, Section 10(b) of the Securities Exchange Act of 1934
(“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder, and
Section 14(e) of the Exchange Act [15 U.S.C. § 78n(e)] and Rule 14e-8 [17 C.F.R. § 240.14e-8]
thereunder.
JURISDICTION AND VENUE
7. The Commission brings this action pursuant to Section 21(d) of the Exchange Act
[15 U.S.C. § 78u(d)] to enjoin such acts, practices, and courses of business; obtain a civil money
penalty; prohibit ten Cate from acting as an officer or director of any public company; and such
other and further relief as the Court may deem just and appropriate.
8. This Court has jurisdiction over this action pursuant to Sections 21(d) and 27 of the
Exchange Act [15 U.S.C. §§ 78u(d) and 78aa].
9. Defendant directed his conduct to United States investors, including by publicizing
the false tender offer through an advertisement that he arranged to appear in The New York Times.
As a result, Defendant’s false tender offer received publicity in the financial media in the United
States.  Further, Defendant’s false tender offer had a foreseeable and substantial effect in the
United States, interrupting normal market forces and causing an artificial and substantial spike in
both the price and trading volume of Textron shares on the NYSE.  Additionally, Defendant had
numerous email communications with The New York Times to arrange publication of the
advertisement containing the false tender offer.  Defendant also had numerous email
communications with a service provider in New York that they engaged to provide technical
assistance with a filing that would have been required in order for their false tender offer to be
accessible to US investors via the SEC’s Electronic Data Gathering and Retrieval (“EDGAR”)
system.  Ten Cate accessed the SEC’s EDGAR system in an attempt to lodge the false tender offer.
Although the SEC staff prevented the filing of the false tender offer, Defendant intended to utilize

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a U.S. government platform to facilitate his fraud.  Subsequent to the publication of the false
tender offer via the advertisement in The New York Times, ten Cate gave an interview to SEC
staff in which he made a number of false statements about Xcalibur’s financing and supposed
ability to complete the tender offer.
10. In addition to the above contacts in the United States, ten Cate is a United States
citizen, and communicated with at least one United States-based institutional investor concerning
the false tender offer for Textron.  Defendant had additional contacts in the United States in
connection with his prior overtures for Textron, including his transmission of emails and financial
data to Textron, and contact with the NYSE concerning a potential direct listing for Xcalibur.
11. Venue in this District is proper because certain of the acts, practices, transactions,
and courses of business constituting the violations alleged herein occurred within the Southern
District of New York, including the announcement of the tender offer, in part, through an
advertisement in the Manhattan-based New York Times and the engagement with a Manhattan-
based service provider for technical services related to filing the tender offer in EDGAR.
DEFENDANT
12. Melville Peter ten Cate (“ten Cate”), age 52, is a United States citizen who resided
in Europe during the relevant time period.  Ten Cate was the sole principal and Chief Technology
Officer of Xcalibur Aerospace, Ltd.
OTHER RELEVANT ENTITIES
13. Xcalibur Aerospace, Ltd. (“Xcalibur”) was a purported United Kingdom-based
aerospace defense company incorporated in May 2016.  The company was a purported wholly-
owned subsidiary of Xcalibur Aerospace LLC (“Xcalibur U.S.”), a Delaware Corporation.  Upon
the petition of one of Xcalibur’s creditors, the Business and Property Courts of England and Wales
issued an order on July 7, 2021, to place Xcalibur in liquidation and wind up the company.

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14. Xcalibur Aerospace LLC (“Xcalibur U.S.”), the purported parent company of
Xcalibur, was a Delaware limited liability company incorporated in 2016 but voided on June 1,
2019, for failure to pay taxes.  Xcalibur U.S. was created by an associate of ten Cate and former
board member of Xcalibur.
15. Textron, Inc. (“Textron”) is a Delaware corporation, headquartered in Providence,
Rhode Island.  Textron is a global aircraft, defense, and industrial company, with a market
capitalization of more than $10 billion.  Textron’s common stock trades on the NYSE under the
ticker symbol “TXT.”  At the time of Xcalibur’s November 2020 tender offer announcement,
Textron had approximately 229 million shares of common stock outstanding.
FACTS
Background to the False Tender Offer
16. On January 4, 2019, ten Cate, sole principal and self-identified Chief Technology
Officer of Xcalibur, sent an email to the Head of Investor Relations for Textron that included a
letter addressed to Textron’s CEO and a purported tender offer by Xcalibur to purchase Textron’s
outstanding common stock for $66 per share.  Textron requested documents to verify the
legitimacy of the offer.  In response, ten Cate provided a number of documents to Textron
concerning Xcalibur’s purported financial condition, including documents stating that Xcalibur
earned approximately £161 million in revenue for 2018, and that in January 2019, Xcalibur had
received a $6.4 billion investment from a member of the Saudi Royal family.
17. An investigation of ten Cate undertaken by Textron revealed a host of business
failures, questionable commercial dealings, unpaid debts, and allegations of fraud, including
attempts to deceive the governments of Iceland and Spain.  The investigation also revealed a
number of personal and commercial bankruptcies involving ten Cate, as well as other lawsuits
against ten Cate and companies he controlled, including:

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 2015 and 2017 U.K. bankruptcy orders against ten Cate;
 The bankruptcy and delisting of ten Cate’s Icelandic operating company in 2015
and 2016;
 A 2007 Luxembourg bankruptcy judgment against Ten Cate Industries Holdings,
SA, an entity controlled by ten Cate; and
 A 2008 U.S. District Court for the Eastern District of Virginia default judgment
against ECA Program PLC, an entity controlled by ten Cate, in a suit alleging that
ECA fraudulently received $1.66 million pursuant to a contract in which it had
agreed to supply helicopters, flight crews, and maintenance staff to a Virginia
corporation, but instead used the money to satisfy the bankruptcy judgment for Ten
Cate Industries Holdings.
18. Textron concluded that ten Cate and Xcalibur lacked credibility and could not
feasibly have the financial means to pursue the proposed offer.  Accordingly, Textron’s CEO
informed ten Cate via email that Textron was not interested in pursuing Xcalibur’s offer.
19. On February 28, 2020, ten Cate again reached out to Textron’s CEO via email,
stating that he was authorized to “suggest a cash transaction at $60 per share.”  Ten Cate provided
Textron with Xcalibur’s purported 2019 financial statements, which claimed that its revenue more
than doubled to approximately £360 million and its assets increased to approximately £10.3
billion, including approximately £9.8 billion in cash and cash equivalents.  These 2019 financial
statements were internally inconsistent.  Among other things, although Xcalibur claimed to grow
from 238 employees at year-end 2018 to 414 employees at year-end 2019, its wage and salary
expenses remained £6 million and its operating costs were exactly £62,094,786 both years.
Textron did not respond to the offer.

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Ten Cate Publicly Announces the Fake Tender Offer
20. In early November 2020, ten Cate arranged for an advertisement to be placed in The
New York Times announcing Xcalibur’s tender offer for the common stock of Textron.  On
November 4, 2020, Ten Cate contacted The New York Times, seeking online and print advertising
for the tender offer announcement.  Ten Cate initially sought to have the advertising campaign
begin on November 5, but after exchanging a series of emails with ten Cate concerning logistics,
The New York Times agreed to publish the advertisement on November 9, 2020.  Upon The New
York Times’ request for advanced payment, ten Cate provided an international bank wire receipt
indicating payment from a purported Swiss bank account.  However, no such bank account existed.
The New York Times was never paid for the advertisement.

[THIS SPACE IS LEFT BLANK INTENTIONALLY]

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21. On Monday, November 9, 2020, The New York Times published the tender offer
advertisement on page B3.  Ten Cate was responsible for the information contained in the
advertisement.

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22. The advertisement announced Xcalibur’s offer to purchase in cash all outstanding
shares of Textron’s common stock for $60.50 per share, an approximately 56% premium over
Textron’s closing share price of $38.83 on Friday, November 6, 2020.  The advertisement stated
that Xcalibur expected to submit to the Commission its Schedule TO – a filing used to report
written communications relating to a tender offer – on November 10, 2020, and that the offer was
to expire on December 11, 2020.
23. The advertisement described Xcalibur as “an aerospace and defence company
specializing in the development and manufacturing of high speed unmanned aircraft systems
(UCAV)” and its purported parent company, Xcalibur Aerospace LLC (“Xcalibur U.S.”), as “a
diversified global investment company focusing on A&D opportunities” with “four growth
platforms:  emerging defence markets, opportunistic, private equity and foreign exchange contract
related export credit.” Ten Cate knew or was reckless in not knowing that these claims were false.
24. Although the advertisement portrayed Xcalibur as a company with the legitimate
intention of commencing and consummating the tender offer and with the financial means to
complete the offer, it stated that Xcalibur’s financial condition was not relevant to shareholders’
decision to tender their shares because, among other reasons, (1) the tender offer “is being made
for all outstanding Shares solely for cash;” (2) Xcalibur “will have sufficient funds available to
purchase all Shares successfully tendered in the Offer;” and (3) “the Offer is not subject to any
financing condition.”  Ten Cate knew or was reckless in not knowing that these claims were false.
25. The false statements in the advertisement included that:
 Xcalibur U.S. “entered into a facilities agreement with Investment Banking partners
and Members pursuant to which such credit institutions have committed to provide
term loan credit facilities to [Xcalibur U.S.] in the aggregate amount of up to $11
billion.”

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 Xcalibur U.S. “expects, based upon the combination of internally available cash and
borrowings under the term loan credit facilities and/or other available committed
credit facilities and/or the issue of debt securities in various debt capital markets, to
have sufficient cash on hand at the expiration of the Offer to pay the Offer Price for
all Shares in the Offer.”
26.  Ten Cate made these misrepresentations knowingly or recklessly.  Ten Cate and
Xcalibur had no ability to commence the tender offer or consummate their offer to acquire control
of Textron.  To do so was impossible given their complete lack of financial resources.
27. Xcalibur had minimal, if any, operations and assets.  Xcalibur U.S. was not the
diversified global investment company with access to billions of dollars in financing described in
the advertisement.  Xcalibur U.S. existed solely on paper with no operations or assets.  It was
created in 2016 by a friend of ten Cate’s merely through the filing of paperwork in Delaware and
the opening of a bank account with a $100 deposit.  After ten Cate failed to reimburse the $100,
the individual withdrew the money and closed the account.  Further, at the time of the proposed
tender offer, Xcalibur U.S.’s corporate status in Delaware had been voided for failure to pay taxes.
28. The credit facilities and available cash referenced in the advertisement did not exist.
Xcalibur lacked the $11 billion in cash it had calculated was necessary to complete the transaction,
let alone the $14 billion the transaction in fact required, and would not have been able to complete
the tender offer without outside financing, which did not exist.
29. The advertisement further claimed, contrary to ten Cate and Xcalibur’s actual
interactions with Textron, that Xcalibur was waiting to “engage in meaningful discussions
regarding our proposal” with Textron’s Board of Directors and that the Board “has not approved or
disapproved the Offer at this time.”  The advertisement failed to disclose that Xcalibur had made at
least two previous tender offer overtures to Textron and that Textron had resolutely rejected the

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first and did not respond to the second.
30. The advertisement directed investors to Xcalibur’s website
(www.xcaliburaero.co.uk) and its agents identified on the website for questions.
31. On the morning of November 9, 2020, Xcalibur’s website was updated to include a
webpage titled “TXT TENDER OFFER.”  The webpage included the top portion of The New
York Times advertisement announcing the tender offer and directed readers to “Send us an email
to obtain the Term Sheet for the projected Tender Offer.”  The webpage also assigned an
unsubstantiated value of $20 billion to a combined Xcalibur and Textron entity.
32. In connection with the November 2020 advertisement and the phony tender offer, a
New York-based printing and filing company hired by ten Cate provided technical services to
Xcalibur in preparation for filing the Schedule TO.  Ten Cate never paid the company despite
providing multiple excuses for delayed payment and repeated promises that payment was
forthcoming.  When pressed by representatives of the company about the delay, ten Cate assured
them that it would make no sense for Xcalibur to have billions of dollars to buy Textron, but not
$5,000 owed to the printing company.  Eventually, ten Cate falsely asserted that he had transferred
payment.  However, the documentation ten Cate provided to the company as evidence of the wire
transfer confirmation was fabricated, and no transfer was ever made.
Reaction to Xcalibur’s Announcement
33. The misrepresentation in Xcalibur’s announcement was material to Textron’s
investors and prospective investors.  Throughout the day on November 9, 2020, several media
outlets reported on Xcalibur’s tender offer.  The trading volume for Textron shares was nearly
450% higher than that of the prior trading day, the price of the stock spiked, and the NYSE
temporarily halted trading of Textron shares.
34. Textron issued a press release responding to the purported tender offer stating its

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belief that “the purported tender offer is fictitious and is being made in violation of U.S. securities
laws, including relevant filing and disclosure requirements.”  The release further stated that “in the
past two years Textron has received other purported indications of interest from Xcalibur, and each
time Xcalibur has been unable to provide details of its financial wherewithal” and that “[a]s it has
done previously, Textron has informed relevant authorities of this most recent fictitious offer.”
35. Later that afternoon, ten Cate directed that a response to Textron’s press release be
posted on Xcalibur’s website criticizing Textron’s senior management for not “engag[ing] in
earnest” and for “discarding [Xcalibur’s previous offer] out of hand, without consideration for
their investors.”  According to Xcalibur’s statement, “[t]he response of Textron [] does not surprise
us, yet our offer stands and we will defend it in front of the SEC in the days to come.”
36.   A number of investors purchased Textron shares during the morning of November
9, 2020, while the share price was artificially inflated, and subsequently sold those shares for a loss
after the market corrected upon the news of the fraudulent tender offer.
37. The Commission’s processes prevented the filing of the Schedule TO.
38. The purported tender offer expired on December 11, 2020, without being extended.
Defendant has made no additional offers to Textron.
Ten Cate’s Communications with Commission Staff
39. In an interview with the Commission staff following the announcement of the
tender offer, ten Cate continued to promote the legitimacy of the tender offer, but in doing so made
a number of false and/or implausible claims, including that: (1) Xcalibur currently had 140
employees and most recent EBITDA of $250 million; (2) Xcalibur’s financial statements had been
audited by an international accounting and auditing firm; and (3) billions of dollars in funds
needed for the tender offer were held in escrow in a Swiss bank account.  Each of these
representations were false.

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40. Despite multiple requests from Commission staff for support for these claims, ten
Cate failed to produce any legitimate evidence corroborating these statements.  Xcalibur never had
had any meaningful capital, employees, or operations.  Further, the accounting firm named by ten
Cate never provided any services to Xcalibur.
41. One document that ten Cate provided to the SEC purported to be a 2019
capitalization table stating that Xcalibur had secured billions of dollars in funding from a U.S.-
based space consulting firm and a Hong Kong-based international banking institution.  The
banking institution identified in the table does not exist.  The space consulting firm referenced by
ten Cate, while real, did not make any investments in Xcalibur.
FIRST CLAIM FOR RELIEF
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder
42. The Commission re-alleges and incorporates by reference the allegations in
paragraphs 1-41 inclusive, as if they were fully set forth herein.
43. Defendant, directly or indirectly, by use of the means or instruments of interstate
commerce or of the mails, or the facility of national securities exchanges, in connection with the
purchase or sale of securities, knowingly or recklessly:
(a) employed devices, schemes, or artifices to defraud;
(b) made untrue statements of material facts or omitted to state material facts necessary
in order to make the statements made, in light of the circumstances under which
they were made, not misleading; and/or
(c) engaged in acts, practices, or courses of business which operated or would operate
as a fraud or deceit upon any person.
44. By reason of the foregoing, ten Cate violated and, unless enjoined, will continue to
violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Rule 10b-5 [17 C.F.R.§

14

240.10b-5], thereunder.
SECOND CLAIM FOR RELIEF
Violations of Section 14(e) of the Exchange Act and Rule 14e-8 Thereunder
45. The Commission re-alleges and incorporates by reference the allegations in
paragraphs 1-41 inclusive, as if they were fully set forth herein.
46. Defendant made untrue statements of material fact or omitted to state material facts
necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading, or engaged in fraudulent, deceptive, or manipulative acts or practices
in connection with a tender offer or a solicitation of security holders in favor of an offer, request,
or invitation.
47. On November 9, 2020, ten Cate publicly announced that Xcalibur planned to make
a tender offer that had not yet been commenced, and Defendant:
(a) made the announcement of a potential tender offer without the intention to
commence the offer within a reasonable time and complete the offer; and
(b) did not have the reasonable belief that Defendant and Xcalibur would have the
means to purchase securities to complete the offer.
48. By reason of the foregoing, ten Cate violated and, unless enjoined, will continue to
violate, Section 14(e) of the Exchange Act [15 U.S.C. § 78n(e)] and Rule 14e-8 [17 C.F.R. §
240.14e-8], thereunder.
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court enter a final judgment:
(1) Permanently restraining and enjoining Defendant from, directly or indirectly,
violating Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17
C.F.R. § 240.10b-5], and Section 14(e) of the Exchange Act [15 U.S.C. § 78n(e)] and Rule 14e-8

15

thereunder [17 C.F.R. § 240.14e-8];
(2) Permanently restraining and enjoining Defendant, or any entities he controls, from
(i) participating in the issuance, purchase, offer, or sale of any security, or (ii) engaging in
activities for purposes of inducing or attempting to induce the purchase or sale of any security;
provided, however, that he not be prevented from purchasing or selling securities listed on a
national securities exchange for his own personal account;
(3) Ordering Defendant to pay a civil penalty pursuant to Section 21(d) of the
Exchange Act [15 U.S.C. § 78u(d)];
(4) Prohibiting Defendant from acting as an officer or director of any issuer that has a
class of securities registered pursuant to Section 12 of the Exchange Act, 15 U.S.C. § 78l or that is
required to file reports pursuant to Section 15(d) of the Exchange Act, 15 U.S.C. § 78o(d); and
(5) Granting such other and further relief as this Court may deem just, equitable, or
necessary in connection with the enforcement of the federal securities laws and for the
protection of investors.

Dated: April 5, 2022
Respectfully submitted,
                        /s/ Duane K Thompson
Of Counsel:   Duane K. Thompson*
Amy L. Friedman  Edward J. Reilly
Brian Vann Securities and Exchange Commission
Securities and Exchange Commission 100 F Street, NE
100 F Street NE Washington, D.C. 20549
Washington, D.C. 20549 Tele: 202/551-7159 (Thompson)
 [email protected]

*Application for admission pro hac vice pending

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF NEW YORK 
 

 

 

22-cv-2787 

 

 

COMPLAINT 

 

JURY TRIAL DEMANDED 

 
 

 

 

Plaintiff Securities and Exchange Commission (the “Commission” or “SEC”) files this 

Complaint against Melville Peter ten Cate and alleges as follows: 

SUMMARY 

1. Melville Peter ten Cate (“ten Cate” or “Defendant”) and his now defunct private 

company Xcalibur Aerospace, Ltd. (“Xcalibur”) knowingly or recklessly made a false and 

financially unviable tender offer for Textron, Inc. (“Textron”), a New York Stock Exchange-listed 

aircraft, defense and industrial company with a market capitalization of more than $10 billion.  Ten 

Cate was the sole principal and officer of Xcalibur, which purported to be a United Kingdom-

based “aerospace and defence company specializing in the development and manufacturing of high 

speed unmanned aircraft systems.”  As ten Cate knew or was reckless in not knowing, Xcalibur 

had negligible, if any, assets, operations and revenue, and was never positioned to make any 

legitimate offer for Textron.   

2. Notwithstanding this reality, on Monday, November 9, 2020, ten Cate placed a New 

York Times advertisement announcing Xcalibur’s offer, set to expire on December 11, 2020, to 

purchase all outstanding shares of Textron common stock for $60.50, an approximately 56% 

 

SECURITIES AND EXCHANGE 

COMMISSION, 

 

Plaintiff, 

 

v. 

 

MELVILLE PETER TEN CATE, 

 

Defendant. 

Case 1:22-cv-02787   Document 1   Filed 04/05/22   Page 1 of 15



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premium over the stock’s previous closing price.  The transaction would have required more than 

$14 billion to complete.  Ten Cate falsely stated in the advertisement that Xcalibur had secured 

$11 billion in financing to complete the offer.  Ten Cate also directed a similar announcement to 

appear on Xcalibur’s public website.  

3. The November 2020 public announcement followed Defendant’s previous non-

public overtures to acquire Textron.  Ten Cate first approached Textron via email on January 4, 

2019, attaching a purported tender offer by Xcalibur to purchase Textron’s outstanding common 

stock for $66 per share.  Following a brief exchange, ten Cate provided what purported to be 

Xcalibur’s financial statements to Textron.  At the time, Textron’s CEO sent an email to ten Cate 

stating that Textron was not interested in pursuing Xcalibur’s offer.  A little over a year later, on 

February 28, 2020, ten Cate sent another email to Textron’s CEO, again with Xcalibur’s purported 

financial information, stating that he was authorized to “suggest a cash transaction at $60 per 

share.”  Textron did not respond to the offer. 

4. The November 2020 tender offer announcement was materially false and 

misleading because, among other things, it failed to disclose that ten Cate and Xcalibur were 

incapable of completing the tender offer as they lacked the financial means to do so, that ten Cate 

and entities he controlled had been the subject of multiple bankruptcy and default judgments, and 

that Textron had previously rejected Xcalibur’s offers to acquire or merge with Textron.  Ten Cate 

knew or was reckless in not knowing each of these facts.    

5. After the announcement of Xcalibur’s fraudulent tender offer, Textron’s common 

stock price rose approximately 15% before market close on November 9.  Its trading volume was 

approximately 450% higher than during the prior trading day, causing the New York Stock 

Exchange (“NYSE”) to halt trading in Textron’s shares.    

6. By engaging in the conduct described in this Complaint, Defendant violated, and 

Case 1:22-cv-02787   Document 1   Filed 04/05/22   Page 2 of 15



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unless enjoined will continue to violate, Section 10(b) of the Securities Exchange Act of 1934 

(“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder, and 

Section 14(e) of the Exchange Act [15 U.S.C. § 78n(e)] and Rule 14e-8 [17 C.F.R. § 240.14e-8] 

thereunder. 

JURISDICTION AND VENUE 

7. The Commission brings this action pursuant to Section 21(d) of the Exchange Act 

[15 U.S.C. § 78u(d)] to enjoin such acts, practices, and courses of business; obtain a civil money 

penalty; prohibit ten Cate from acting as an officer or director of any public company; and such 

other and further relief as the Court may deem just and appropriate. 

8. This Court has jurisdiction over this action pursuant to Sections 21(d) and 27 of the 

Exchange Act [15 U.S.C. §§ 78u(d) and 78aa]. 

9. Defendant directed his conduct to United States investors, including by publicizing 

the false tender offer through an advertisement that he arranged to appear in The New York Times.  

As a result, Defendant’s false tender offer received publicity in the financial media in the United 

States.  Further, Defendant’s false tender offer had a foreseeable and substantial effect in the 

United States, interrupting normal market forces and causing an artificial and substantial spike in 

both the price and trading volume of Textron shares on the NYSE.  Additionally, Defendant had 

numerous email communications with The New York Times to arrange publication of the 

advertisement containing the false tender offer.  Defendant also had numerous email 

communications with a service provider in New York that they engaged to provide technical 

assistance with a filing that would have been required in order for their false tender offer to be 

accessible to US investors via the SEC’s Electronic Data Gathering and Retrieval (“EDGAR”) 

system.  Ten Cate accessed the SEC’s EDGAR system in an attempt to lodge the false tender offer.  

Although the SEC staff prevented the filing of the false tender offer, Defendant intended to utilize 

Case 1:22-cv-02787   Document 1   Filed 04/05/22   Page 3 of 15



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a U.S. government platform to facilitate his fraud.  Subsequent to the publication of the false 

tender offer via the advertisement in The New York Times, ten Cate gave an interview to SEC 

staff in which he made a number of false statements about Xcalibur’s financing and supposed 

ability to complete the tender offer.   

10. In addition to the above contacts in the United States, ten Cate is a United States 

citizen, and communicated with at least one United States-based institutional investor concerning 

the false tender offer for Textron.  Defendant had additional contacts in the United States in 

connection with his prior overtures for Textron, including his transmission of emails and financial 

data to Textron, and contact with the NYSE concerning a potential direct listing for Xcalibur.   

11. Venue in this District is proper because certain of the acts, practices, transactions, 

and courses of business constituting the violations alleged herein occurred within the Southern 

District of New York, including the announcement of the tender offer, in part, through an 

advertisement in the Manhattan-based New York Times and the engagement with a Manhattan-

based service provider for technical services related to filing the tender offer in EDGAR.   

DEFENDANT 

12. Melville Peter ten Cate (“ten Cate”), age 52, is a United States citizen who resided 

in Europe during the relevant time period.  Ten Cate was the sole principal and Chief Technology 

Officer of Xcalibur Aerospace, Ltd.   

OTHER RELEVANT ENTITIES 

13. Xcalibur Aerospace, Ltd. (“Xcalibur”) was a purported United Kingdom-based 

aerospace defense company incorporated in May 2016.  The company was a purported wholly-

owned subsidiary of Xcalibur Aerospace LLC (“Xcalibur U.S.”), a Delaware Corporation.  Upon 

the petition of one of Xcalibur’s creditors, the Business and Property Courts of England and Wales 

issued an order on July 7, 2021, to place Xcalibur in liquidation and wind up the company. 

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14. Xcalibur Aerospace LLC (“Xcalibur U.S.”), the purported parent company of 

Xcalibur, was a Delaware limited liability company incorporated in 2016 but voided on June 1, 

2019, for failure to pay taxes.  Xcalibur U.S. was created by an associate of ten Cate and former 

board member of Xcalibur.  

15. Textron, Inc. (“Textron”) is a Delaware corporation, headquartered in Providence, 

Rhode Island.  Textron is a global aircraft, defense, and industrial company, with a market 

capitalization of more than $10 billion.  Textron’s common stock trades on the NYSE under the 

ticker symbol “TXT.”  At the time of Xcalibur’s November 2020 tender offer announcement, 

Textron had approximately 229 million shares of common stock outstanding.  

FACTS 

Background to the False Tender Offer 

16. On January 4, 2019, ten Cate, sole principal and self-identified Chief Technology 

Officer of Xcalibur, sent an email to the Head of Investor Relations for Textron that included a 

letter addressed to Textron’s CEO and a purported tender offer by Xcalibur to purchase Textron’s 

outstanding common stock for $66 per share.  Textron requested documents to verify the 

legitimacy of the offer.  In response, ten Cate provided a number of documents to Textron 

concerning Xcalibur’s purported financial condition, including documents stating that Xcalibur 

earned approximately £161 million in revenue for 2018, and that in January 2019, Xcalibur had 

received a $6.4 billion investment from a member of the Saudi Royal family.   

17. An investigation of ten Cate undertaken by Textron revealed a host of business 

failures, questionable commercial dealings, unpaid debts, and allegations of fraud, including 

attempts to deceive the governments of Iceland and Spain.  The investigation also revealed a 

number of personal and commercial bankruptcies involving ten Cate, as well as other lawsuits 

against ten Cate and companies he controlled, including: 

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 2015 and 2017 U.K. bankruptcy orders against ten Cate; 

 The bankruptcy and delisting of ten Cate’s Icelandic operating company in 2015 

and 2016; 

 A 2007 Luxembourg bankruptcy judgment against Ten Cate Industries Holdings, 

SA, an entity controlled by ten Cate; and  

 A 2008 U.S. District Court for the Eastern District of Virginia default judgment 

against ECA Program PLC, an entity controlled by ten Cate, in a suit alleging that 

ECA fraudulently received $1.66 million pursuant to a contract in which it had 

agreed to supply helicopters, flight crews, and maintenance staff to a Virginia 

corporation, but instead used the money to satisfy the bankruptcy judgment for Ten 

Cate Industries Holdings.   

18. Textron concluded that ten Cate and Xcalibur lacked credibility and could not 

feasibly have the financial means to pursue the proposed offer.  Accordingly, Textron’s CEO 

informed ten Cate via email that Textron was not interested in pursuing Xcalibur’s offer.   

19. On February 28, 2020, ten Cate again reached out to Textron’s CEO via email, 

stating that he was authorized to “suggest a cash transaction at $60 per share.”  Ten Cate provided 

Textron with Xcalibur’s purported 2019 financial statements, which claimed that its revenue more 

than doubled to approximately £360 million and its assets increased to approximately £10.3 

billion, including approximately £9.8 billion in cash and cash equivalents.  These 2019 financial 

statements were internally inconsistent.  Among other things, although Xcalibur claimed to grow 

from 238 employees at year-end 2018 to 414 employees at year-end 2019, its wage and salary 

expenses remained £6 million and its operating costs were exactly £62,094,786 both years.  

Textron did not respond to the offer. 

  

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Ten Cate Publicly Announces the Fake Tender Offer 

20. In early November 2020, ten Cate arranged for an advertisement to be placed in The 

New York Times announcing Xcalibur’s tender offer for the common stock of Textron.  On 

November 4, 2020, Ten Cate contacted The New York Times, seeking online and print advertising 

for the tender offer announcement.  Ten Cate initially sought to have the advertising campaign 

begin on November 5, but after exchanging a series of emails with ten Cate concerning logistics, 

The New York Times agreed to publish the advertisement on November 9, 2020.  Upon The New 

York Times’ request for advanced payment, ten Cate provided an international bank wire receipt 

indicating payment from a purported Swiss bank account.  However, no such bank account existed.  

The New York Times was never paid for the advertisement.  

 

[THIS SPACE IS LEFT BLANK INTENTIONALLY]  

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21. On Monday, November 9, 2020, The New York Times published the tender offer 

advertisement on page B3.  Ten Cate was responsible for the information contained in the 

advertisement.   

  

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22. The advertisement announced Xcalibur’s offer to purchase in cash all outstanding 

shares of Textron’s common stock for $60.50 per share, an approximately 56% premium over 

Textron’s closing share price of $38.83 on Friday, November 6, 2020.  The advertisement stated 

that Xcalibur expected to submit to the Commission its Schedule TO – a filing used to report 

written communications relating to a tender offer – on November 10, 2020, and that the offer was 

to expire on December 11, 2020. 

23. The advertisement described Xcalibur as “an aerospace and defence company 

specializing in the development and manufacturing of high speed unmanned aircraft systems 

(UCAV)” and its purported parent company, Xcalibur Aerospace LLC (“Xcalibur U.S.”), as “a 

diversified global investment company focusing on A&D opportunities” with “four growth 

platforms:  emerging defence markets, opportunistic, private equity and foreign exchange contract 

related export credit.” Ten Cate knew or was reckless in not knowing that these claims were false. 

24. Although the advertisement portrayed Xcalibur as a company with the legitimate 

intention of commencing and consummating the tender offer and with the financial means to 

complete the offer, it stated that Xcalibur’s financial condition was not relevant to shareholders’ 

decision to tender their shares because, among other reasons, (1) the tender offer “is being made 

for all outstanding Shares solely for cash;” (2) Xcalibur “will have sufficient funds available to 

purchase all Shares successfully tendered in the Offer;” and (3) “the Offer is not subject to any 

financing condition.”  Ten Cate knew or was reckless in not knowing that these claims were false. 

25. The false statements in the advertisement included that:  

 Xcalibur U.S. “entered into a facilities agreement with Investment Banking partners 

and Members pursuant to which such credit institutions have committed to provide 

term loan credit facilities to [Xcalibur U.S.] in the aggregate amount of up to $11 

billion.” 

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 Xcalibur U.S. “expects, based upon the combination of internally available cash and 

borrowings under the term loan credit facilities and/or other available committed 

credit facilities and/or the issue of debt securities in various debt capital markets, to 

have sufficient cash on hand at the expiration of the Offer to pay the Offer Price for 

all Shares in the Offer.” 

26.  Ten Cate made these misrepresentations knowingly or recklessly.  Ten Cate and 

Xcalibur had no ability to commence the tender offer or consummate their offer to acquire control 

of Textron.  To do so was impossible given their complete lack of financial resources.    

27. Xcalibur had minimal, if any, operations and assets.  Xcalibur U.S. was not the 

diversified global investment company with access to billions of dollars in financing described in 

the advertisement.  Xcalibur U.S. existed solely on paper with no operations or assets.  It was 

created in 2016 by a friend of ten Cate’s merely through the filing of paperwork in Delaware and 

the opening of a bank account with a $100 deposit.  After ten Cate failed to reimburse the $100, 

the individual withdrew the money and closed the account.  Further, at the time of the proposed 

tender offer, Xcalibur U.S.’s corporate status in Delaware had been voided for failure to pay taxes.   

28. The credit facilities and available cash referenced in the advertisement did not exist.  

Xcalibur lacked the $11 billion in cash it had calculated was necessary to complete the transaction, 

let alone the $14 billion the transaction in fact required, and would not have been able to complete 

the tender offer without outside financing, which did not exist. 

29. The advertisement further claimed, contrary to ten Cate and Xcalibur’s actual 

interactions with Textron, that Xcalibur was waiting to “engage in meaningful discussions 

regarding our proposal” with Textron’s Board of Directors and that the Board “has not approved or 

disapproved the Offer at this time.”  The advertisement failed to disclose that Xcalibur had made at 

least two previous tender offer overtures to Textron and that Textron had resolutely rejected the 

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first and did not respond to the second. 

30. The advertisement directed investors to Xcalibur’s website 

(www.xcaliburaero.co.uk) and its agents identified on the website for questions.    

31. On the morning of November 9, 2020, Xcalibur’s website was updated to include a 

webpage titled “TXT TENDER OFFER.”  The webpage included the top portion of The New 

York Times advertisement announcing the tender offer and directed readers to “Send us an email 

to obtain the Term Sheet for the projected Tender Offer.”  The webpage also assigned an 

unsubstantiated value of $20 billion to a combined Xcalibur and Textron entity.   

32. In connection with the November 2020 advertisement and the phony tender offer, a 

New York-based printing and filing company hired by ten Cate provided technical services to 

Xcalibur in preparation for filing the Schedule TO.  Ten Cate never paid the company despite 

providing multiple excuses for delayed payment and repeated promises that payment was 

forthcoming.  When pressed by representatives of the company about the delay, ten Cate assured 

them that it would make no sense for Xcalibur to have billions of dollars to buy Textron, but not 

$5,000 owed to the printing company.  Eventually, ten Cate falsely asserted that he had transferred 

payment.  However, the documentation ten Cate provided to the company as evidence of the wire 

transfer confirmation was fabricated, and no transfer was ever made.   

Reaction to Xcalibur’s Announcement 

33. The misrepresentation in Xcalibur’s announcement was material to Textron’s 

investors and prospective investors.  Throughout the day on November 9, 2020, several media 

outlets reported on Xcalibur’s tender offer.  The trading volume for Textron shares was nearly 

450% higher than that of the prior trading day, the price of the stock spiked, and the NYSE 

temporarily halted trading of Textron shares.   

34. Textron issued a press release responding to the purported tender offer stating its 

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http://www.xcaliburaero.co.uk/


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belief that “the purported tender offer is fictitious and is being made in violation of U.S. securities 

laws, including relevant filing and disclosure requirements.”  The release further stated that “in the 

past two years Textron has received other purported indications of interest from Xcalibur, and each 

time Xcalibur has been unable to provide details of its financial wherewithal” and that “[a]s it has 

done previously, Textron has informed relevant authorities of this most recent fictitious offer.”   

35. Later that afternoon, ten Cate directed that a response to Textron’s press release be 

posted on Xcalibur’s website criticizing Textron’s senior management for not “engag[ing] in 

earnest” and for “discarding [Xcalibur’s previous offer] out of hand, without consideration for 

their investors.”  According to Xcalibur’s statement, “[t]he response of Textron [] does not surprise 

us, yet our offer stands and we will defend it in front of the SEC in the days to come.” 

36.   A number of investors purchased Textron shares during the morning of November 

9, 2020, while the share price was artificially inflated, and subsequently sold those shares for a loss 

after the market corrected upon the news of the fraudulent tender offer. 

37. The Commission’s processes prevented the filing of the Schedule TO.    

38. The purported tender offer expired on December 11, 2020, without being extended.  

Defendant has made no additional offers to Textron.   

Ten Cate’s Communications with Commission Staff 

39. In an interview with the Commission staff following the announcement of the 

tender offer, ten Cate continued to promote the legitimacy of the tender offer, but in doing so made 

a number of false and/or implausible claims, including that: (1) Xcalibur currently had 140 

employees and most recent EBITDA of $250 million; (2) Xcalibur’s financial statements had been 

audited by an international accounting and auditing firm; and (3) billions of dollars in funds 

needed for the tender offer were held in escrow in a Swiss bank account.  Each of these 

representations were false.  

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40. Despite multiple requests from Commission staff for support for these claims, ten 

Cate failed to produce any legitimate evidence corroborating these statements.  Xcalibur never had 

had any meaningful capital, employees, or operations.  Further, the accounting firm named by ten 

Cate never provided any services to Xcalibur. 

41. One document that ten Cate provided to the SEC purported to be a 2019 

capitalization table stating that Xcalibur had secured billions of dollars in funding from a U.S.-

based space consulting firm and a Hong Kong-based international banking institution.  The 

banking institution identified in the table does not exist.  The space consulting firm referenced by 

ten Cate, while real, did not make any investments in Xcalibur.    

FIRST CLAIM FOR RELIEF 

Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder 

42. The Commission re-alleges and incorporates by reference the allegations in 

paragraphs 1-41 inclusive, as if they were fully set forth herein. 

43. Defendant, directly or indirectly, by use of the means or instruments of interstate 

commerce or of the mails, or the facility of national securities exchanges, in connection with the 

purchase or sale of securities, knowingly or recklessly: 

(a) employed devices, schemes, or artifices to defraud; 

(b) made untrue statements of material facts or omitted to state material facts necessary 

in order to make the statements made, in light of the circumstances under which 

they were made, not misleading; and/or 

(c) engaged in acts, practices, or courses of business which operated or would operate 

as a fraud or deceit upon any person. 

44. By reason of the foregoing, ten Cate violated and, unless enjoined, will continue to 

violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Rule 10b-5 [17 C.F.R.§ 

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240.10b-5], thereunder. 

SECOND CLAIM FOR RELIEF 

Violations of Section 14(e) of the Exchange Act and Rule 14e-8 Thereunder 

45. The Commission re-alleges and incorporates by reference the allegations in 

paragraphs 1-41 inclusive, as if they were fully set forth herein. 

46. Defendant made untrue statements of material fact or omitted to state material facts 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading, or engaged in fraudulent, deceptive, or manipulative acts or practices 

in connection with a tender offer or a solicitation of security holders in favor of an offer, request, 

or invitation. 

47. On November 9, 2020, ten Cate publicly announced that Xcalibur planned to make 

a tender offer that had not yet been commenced, and Defendant: 

(a) made the announcement of a potential tender offer without the intention to 

commence the offer within a reasonable time and complete the offer; and  

(b) did not have the reasonable belief that Defendant and Xcalibur would have the 

means to purchase securities to complete the offer. 

48. By reason of the foregoing, ten Cate violated and, unless enjoined, will continue to 

violate, Section 14(e) of the Exchange Act [15 U.S.C. § 78n(e)] and Rule 14e-8 [17 C.F.R. § 

240.14e-8], thereunder. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court enter a final judgment: 

(1) Permanently restraining and enjoining Defendant from, directly or indirectly, 

violating Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 

C.F.R. § 240.10b-5], and Section 14(e) of the Exchange Act [15 U.S.C. § 78n(e)] and Rule 14e-8 

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thereunder [17 C.F.R. § 240.14e-8]; 

(2) Permanently restraining and enjoining Defendant, or any entities he controls, from 

(i) participating in the issuance, purchase, offer, or sale of any security, or (ii) engaging in 

activities for purposes of inducing or attempting to induce the purchase or sale of any security; 

provided, however, that he not be prevented from purchasing or selling securities listed on a 

national securities exchange for his own personal account; 

(3) Ordering Defendant to pay a civil penalty pursuant to Section 21(d) of the 

Exchange Act [15 U.S.C. § 78u(d)]; 

(4) Prohibiting Defendant from acting as an officer or director of any issuer that has a 

class of securities registered pursuant to Section 12 of the Exchange Act, 15 U.S.C. § 78l or that is 

required to file reports pursuant to Section 15(d) of the Exchange Act, 15 U.S.C. § 78o(d); and   

(5) Granting such other and further relief as this Court may deem just, equitable, or 

necessary in connection with the enforcement of the federal securities laws and for the 

protection of investors. 

 

Dated: April 5, 2022                       

Respectfully submitted, 

                        /s/ Duane K Thompson 

Of Counsel:   Duane K. Thompson* 

Amy L. Friedman  Edward J. Reilly 

Brian Vann Securities and Exchange Commission 

Securities and Exchange Commission 100 F Street, NE 

100 F Street NE Washington, D.C. 20549 

Washington, D.C. 20549 Tele: 202/551-7159 (Thompson) 

 [email protected] 

 

*Application for admission pro hac vice pending 

 

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