A takeover bid for a large American aircraft, defence and industrial company, Textron, announced in a New York Times advertisement was a sham, according to US regulators.

The Times ad, placed in November 2020, was never paid for either.

The Securities and Exchange Commission has charged Melville ten Cate, a US citizen residing abroad, with fraud stemming from his allegedly fraudulent offer to purchase Textron.

The SEC’s complaint alleges that Xcalibur Aerospace Ltd, a now-defunct private company ten Cate controlled, used the ad to announce a proposed purchase of all existing stock of Textron for $60.50 a share, a 56% premium over the stock’s previous closing price.

The ad led to a spike in Textron trading and a subsequent trading halt.

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The SEC has charged ten Cate with violating the antifraud provisions of federal securities laws.

The regulator claims that the announcement was false and misleading because ten Cate and Xcalibur lacked the financial resources to complete the transaction, which would have required an outlay of over $14bn.

Xcalibur’s corporate parent had no operations or assets and had been deactivated for failure to pay taxes.

The SEC complaint also alleges that the ad failed to disclose that ten Cate and entities he controlled had been the subject of multiple bankruptcy and default judgments.

The SEC is seeking permanent and conduct-based injunctions, a penalty, and an officer and director bar. The ambitious suitor also faces criminal charges.