ACM-CPC LLC, a private investment vehicle affiliated with Caydan Capital Partners, has been fined $100,000 by the Securities and Exchange Commission after regulators found the firm filed a misleading Schedule 13D related to its activist campaign against airport wellness company XWELL Inc.
The SEC’s May 4, 2026 cease-and-desist order concluded that ACM-CPC failed to properly disclose plans to replace most of XWELL’s board while simultaneously building a nearly 10% ownership stake in the Nasdaq-listed company.
According to the SEC, ACM-CPC disclosed a 9.42% beneficial ownership position in XWELL on June 17, 2024, the same day it privately sent company management a proposal seeking to replace four of the board’s five directors.
The problem, regulators said, was that the Schedule 13D filed with the public made no mention of the board replacement effort.
Instead, the filing stated ACM-CPC had no present plan or proposal to change the board and described its intentions only in generalized language concerning XWELL’s long-term performance and possible future engagement.
The SEC found that the filing was materially incomplete at the moment it was submitted because the activist strategy had already moved beyond preliminary discussions.
By early June 2024, ACM-CPC had allegedly begun actively recruiting director candidates and discussing ways to pressure the existing board to resign without a shareholder vote. The SEC said the firm contacted at least five prospective nominees before settling on a four-person slate.
XWELL ultimately rejected the nominations, triggering a rapidly escalating dispute between the company and the activist investor.
In public statements issued during the fight, XWELL accused ACM-CPC of attempting to engineer a reverse merger involving one of its affiliates in the pain and wellness sector, characterizing the effort as a potential “take-under” transaction that could dilute existing shareholders and benefit ACM-CPC at the expense of ordinary investors.
The SEC’s order did not address whether ACM-CPC’s strategic objectives were legitimate or whether XWELL’s accusations were accurate. Regulators focused solely on disclosure obligations under Section 13(d) of the Securities Exchange Act.
The enforcement action also centered on ACM-CPC’s failure to promptly amend its Schedule 13D as the campaign intensified.
After XWELL rejected the initial proposal on June 21, 2024, ACM-CPC submitted revised proposals, entered into a mutual non-disclosure agreement with the company on July 8, and eventually filed a lawsuit in Delaware Chancery Court on July 19 alleging breaches of fiduciary duty and improper rejection of its nominees.
Under SEC rules, material changes to the facts disclosed in a Schedule 13D generally must be reported within two business days.
According to the SEC, ACM-CPC failed to amend its filing during that period and did not disclose the rejected proposals, NDA, or Delaware litigation until July 22, 2024, after the proxy contest had already significantly escalated.
The activist campaign ended less than a month later when ACM-CPC voluntarily withdrew both its lawsuit and proxy fight on August 9, 2024.
The SEC resolved the matter through a settlement in which ACM-CPC neither admitted nor denied the agency’s findings. In addition to the $100,000 civil penalty, the firm agreed to cease and desist from future violations of beneficial ownership reporting requirements.
The timing of the order drew additional attention because the SEC issued it on the same day it announced a separate $1.5 million settlement involving delayed Twitter stake disclosures tied to Elon Musk.
While vastly different in scale, both cases centered on the same underlying principle: investors are entitled to timely and accurate disclosure when significant shareholders are building positions and pursuing influence over public companies.
The ACM-CPC matter illustrates how activist campaigns can quickly create disclosure problems when private negotiations, board replacement efforts, and litigation begin moving faster than public filings are updated.
