The former head of a biotech startup, who allegedly misappropriated US$3.2 million from his company, is being sanctioned in a settlement with the U.S. Securities and Exchange Commission (SEC).
The regulator alleged that, between November 2020 and October, 2021, Anthony Joseph Cataldo — the former chair and CEO of GT Biopharma Inc. — transferred US$644,500 from the company’s bank accounts to his own accounts in unauthorized transactions, and that he took another US$2.6 million from the company to make a down payment on a US$9.2 million house that he purchased as his personal residence in Beverly Hills, Calif.
The SEC also alleged that Cataldo sought to cover up the scheme by making false and misleading statements to the company’s auditors, to investors, and in regulatory filings.
Without admitting or denying the regulator’s allegations, Cataldo consented to the entry of a proposed final judgment in a U.S. district court in California, which imposes a permanent injunction against him, a three-year ban officer and director ban, and orders him to pay a US$30,000 penalty.
According to the final order, Cataldo, who was terminated by the company and resigned from the board, in late 2021 paid back the US$2.6 million that he took to finance his home purchase. In 2022, he returned 1.9 million shares of company stock to “resolve all outstanding claims against him” by the company.