They Told Cancer Patients’ Families a Cure Was Coming. They Were Lying to Take Their Money.
CBA Pharma raised $4.1 million from 160 desperate investors by claiming their cancer drug was weeks away from FDA approval. The FDA had already rejected it. The executives knew. They did it anyway.
- $4.1 million stolen from approximately 160 investors across the United States between April 2023 and February 2024.
- The FDA rejected CBA Pharma’s cancer drug application in 2013 for failing to prove it worked. The company never fixed the problems and kept fundraising anyway.
- On April 3, 2023, the FDA formally withdrew CBA Pharma’s drug application entirely. That same day, the company launched a new round of fundraising while telling investors approval was “in its final stages.”
- Wayne Putnam (President, age 80) and Louis “Buzz” Carmichael (VP Capital Markets, age 80) are named as defendants. Both hold securities licenses and knew the law.
- The FBI raided CBA Pharma’s offices on February 28, 2024. The company has since shut down.
- SEC charges: Securities Act Section 17(a) fraud and Exchange Act Section 10(b) / Rule 10b-5. The SEC is demanding full disgorgement, civil penalties, and permanent injunctions.
- Investors were promised returns of up to 40x their money, with pitch materials claiming a $25,000 investment could become $1 million. There was never a viable drug to back any of it.
The Setup: A “Miracle” Drug That Never Existed
CBA Pharma, a small biopharmaceutical company based in Lexington, Kentucky, built its entire business around a single drug: CBT-1. The pitch was genuinely compelling. Cancer patients who fail chemotherapy often do so because their tumors develop “multidrug resistance,” a process where cancer cells essentially eject the chemo drugs before they can do any damage. CBT-1 was supposed to stop that from happening.
On paper, that sounds like a landmark medical breakthrough. CBA Pharma’s own marketing materials called it “the biggest breakthrough drug in history for successfully treating multidrug resistance in cancer patients.” They claimed it worked across over 500 different cancer types.
There was one problem. The drug did not have FDA approval. It never came close. And the people selling it knew that.
Wayne Putnam, age 80, founded the company in 1999 and served as its president, director, and chairman of the board. He previously held a Series 7 and Series 63 securities license. He knew exactly what the law required when selling investments.
Louis “Buzz” Carmichael, also 80, joined as Vice President of Capital Markets around 2006. His entire job was to find investors and convince them to hand over money. He held Series 24, 63, and 65 licenses. He also knew the rules.
A Decade of Rejection: The FDA’s Paper Trail
The history of CBA Pharma’s relationship with the FDA is a case study in denial. Every time the federal government told them their drug was not ready, they found a way to delay, stall, and keep the money flowing in. Here is the timeline, sourced directly from the SEC complaint filed February 5, 2026:
The Lies They Told to 160 People’s Faces
After the FDA pulled the drug application on April 3, 2023, CBA Pharma did not pause fundraising. They did not disclose the withdrawal to investors. They went in the opposite direction. Putnam wrote the marketing materials by hand. Staff typed them up. Carmichael personally distributed them.
Here is what those materials said to the 160 people who handed over $4.1 million total:
These were not misunderstandings or optimistic guesses. The SEC complaint is explicit: at least one CBA Pharma employee warned Putnam before 2021 that the company could not make approval timeline claims to investors. Putnam ignored them. Another employee warned that the communications were “unrealistic.” Putnam ignored that too. A third employee overheard Carmichael making false claims to investors and warned him directly. Carmichael continued.
When you ignore three separate internal warnings from your own staff and keep doing it anyway, that is not a mistake. That is a choice.
The Non-Financial Ledger: What You Can’t Put a Dollar Amount On
The SEC complaint focuses on the $4.1 million in financial losses. That number matters. But numbers do not capture what it means to be the kind of person who invests in a cancer drug.
People do not invest in cancer drug companies for fun. They do it because cancer touched their lives. A parent. A spouse. A sibling. A diagnosis that already came or one they are scared is coming. CBA Pharma did not just take their money. It took the specific hope that comes with believing someone is working on a cure. That hope was manufactured. It was bait.
The pitch promised up to $1 million back on a $25,000 investment. For ordinary people, $25,000 is not pocket change. It is savings. It is retirement money. It is a college fund. Putnam and Carmichael, sitting across the table with their securities licenses and their rehearsed scripts, looked regular people in the eye and took that from them. That transaction is a betrayal of trust at its most cynical.
CBA Pharma spent over 25 years (1999-2024) raising roughly $130 million from several hundred investors in 43 states and 7 countries while producing exactly zero approved products. Every year that money sat in CBA Pharma’s accounts was a year those investors could not use it for something real: actual healthcare, actual retirement, actual security. The opportunity cost of a quarter century of false promises is incalculable.
Legitimate cancer research organizations compete for the same pool of individual donors and investors. Every dollar that flowed into CBA Pharma’s bank accounts was a dollar that did not go to a research institution that might actually produce results. Fraud in medical fundraising does not just hurt its direct victims. It quietly poisons the well for everyone.
The FDA warned CBA Pharma in 2013 that its website was making illegal claims. The company kept the false claims up. Investors had every reason to believe that federal regulators would catch this kind of fraud in real time. It took until February 2024 for the FBI to show up. By then, the money was gone.
Legal Receipts: What the Courts Have on the Record
The following are direct findings and statements from the SEC’s formal complaint filed in the Eastern District of Kentucky (Case No. 5:26-cv-00042-KKC). These are the government’s claims, not yet adjudicated by a court:
Charges Filed
| Count | Charge | Against | Statute |
|---|---|---|---|
| Count I | Securities Fraud | All Defendants | Securities Act Section 17(a) [15 U.S.C. 77q(a)] |
| Count II | Securities Fraud | All Defendants | Exchange Act Section 10(b) / Rule 10b-5 [15 U.S.C. 78j(b)] |
| Count III | Aiding and Abetting (alternative) | Putnam | Exchange Act Section 20(e) [15 U.S.C. 78t(e)] |
| Count IV | Control Person Liability (alternative) | Putnam | Exchange Act Section 20(a) [15 U.S.C. 78t(a)] |
The SEC is seeking: permanent injunctions, full disgorgement of all profits with prejudgment interest, civil monetary penalties, and a conduct-based injunction permanently banning Putnam and Carmichael from participating in any securities offering.
Societal Impact: The Ripple Effect Nobody Talks About
This case is about $4.1 million. But it is also about the systems that allowed it to happen for over two decades and what that pattern of failure costs all of us.
Multidrug resistance is a real and serious problem in cancer treatment. By monopolizing investor attention and dollars with a fraudulent product, CBA Pharma starved legitimate research into this problem of potential funding for 25 years. No viable drug exists because of them. The gap they claimed to fill remains unfilled.
Investment fraud disproportionately hits people who can least afford to lose money: retirees, middle-class families, people who saved for years. The executives who ran this scheme collected salaries from the investor funds the entire time. They got paid. The investors got nothing. That is wealth transfer from the bottom up, not the other way around.
The FDA issued a formal warning about CBA Pharma’s false advertising in 2013. The company ignored it for over a decade. If federal agencies cannot enforce their own warnings fast enough to protect investors, then people are right to ask what those agencies are actually for. Slow enforcement is a form of complicity.
CBA Pharma raised money from investors in 43 states and 7 countries. This was not a local Ponzi scheme. It was a nationally distributed fraud operation that exploited the internet and interstate commerce to maximize its reach. The victims are everywhere.
The “Cost of a Life” Metric: What $4.1 Million Could Have Done Instead
CBA Pharma’s leadership collected paychecks from $4.1 million in investor money during the Royalty Offering Period alone. Here is what that same money could have funded in the real world:
Know the Names: The People Behind This
| Name | Title at CBA Pharma | Age | Role in Fraud (Per SEC Complaint) |
|---|---|---|---|
| Wayne Michael Putnam | President, Director, Chairman of the Board | 80 | Drafted marketing materials by hand; exercised “ultimate control” over company operations; personally solicited investors; knowingly ignored FDA withdrawal when crafting investor pitch. Held Series 7 and Series 63 licenses since 1983. |
| Louis “Buzz” Carmichael | Vice President of Capital Markets | 80 | Primary investor solicitation. Made false oral and written statements to investors including that approval was expected “within 6 to 12 months” after the FDA had withdrawn the application. Held Series 24, 63, and 65 licenses. |
| CBA Pharma, Inc. | Corporate Entity | Founded 1999 | Nevada corporation; principal operations in Lexington, KY. Now shut down. In default as a Nevada corporation. FBI raided offices February 28, 2024. |
What Now: Who to Watch, Who to Contact, How to Fight Back
Regulatory Bodies Currently Involved
- SEC: Securities and Exchange Commission
- FBI: Federal Bureau of Investigation
- FDA: Food and Drug Administration
- EDKY: Eastern District of Kentucky, U.S. District Court
- DOJ: Department of Justice (potential referral)
- FINRA: Financial Industry Regulatory Authority
What You Can Do Right Now
- If you invested in CBA Pharma or the Royalty Offering: Contact the SEC directly. The attorneys of record are Timothy J. Stockwell and Eric M. Phillips at the SEC’s Chicago office (stockwellt@sec.gov | 312-596-6049). You may be a listed victim in the case. Document everything: emails, agreements, bank transfers, every conversation you remember.
- Report investment fraud: Use the SEC’s online tip line at sec.gov/tcr. Reports are confidential and can be submitted anonymously. FINRA’s Investor Complaint Center at finra.org/investors/have-problem is another option for securities-specific complaints.
- Verify before you invest: Every legitimate investment opportunity can be cross-checked. Search the SEC’s EDGAR database (sec.gov/edgar) for company filings. Check FINRA BrokerCheck (brokercheck.finra.org) for any securities professional’s license history and complaints. If a company cannot be found in these systems, that is a red flag.
- For pharmaceutical investment claims specifically: Verify any drug’s FDA status at the FDA’s Drugs@FDA database (accessdata.fda.gov). If a company claims their drug is “in the final stages” of FDA approval, you can check the public record in minutes.
- Support mutual aid and grassroots health advocacy: The victims of this scheme were drawn in by the real and urgent problem of cancer drug access. Organizations like the Patient Advocate Foundation, state-level cancer coalitions, and community health centers address that need without the fraud. Find your local mutual aid network at mutualaidhub.org and direct your energy and dollars there.
- Follow the case: Case No. 5:26-cv-00042-KKC, Eastern District of Kentucky. Public court filings are available via PACER (pacer.gov). This case may develop into criminal referrals. Watch for updates from the SEC’s Litigation Releases at sec.gov/litigation.
- Organize locally: Investor protection and healthcare access are political issues. Local organizing groups focused on financial literacy, healthcare access, and corporate accountability need people and resources. Your state Attorney General’s office also has consumer protection divisions that handle investment fraud. Call them. File reports. Make noise.
The SEC has a press release for this story: https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26479
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