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For the past 10 years, Indianapolis-baste Xytos Inc. claimed it was developing breakthrough treatments for cancer patients.
But now the U.S. Securities & Exchange Commission says the company is a sham.
The SEC accused Xytos and its CEO, Timothy E. Cook, of securities fraud in a lawsuit filed Aug. 19 in federal court in Indianapolis. The suit claims that, since at least 2010, Xytos has had no revenue, employees or even an office, yet Cook, operating from his home, has repeatedly published false information about the company to lure investors.
Xytos' website continued to claim that the company had an operational treatment center. It contained a press release about Xytos' hiring a new medical director when, according to the SEC, it had not. The website also still cited as a director a man who has been dead for five years.
Those "false and misleading" statements have allowed Cook to sell Xytos' shares, which trade over the counter, generating more than $500,000 in income for himself, the SEC said. Cook used some of that money for a Florida vacation, home improvements and video games.