ACM-CPC LLC, a Burlington, Massachusetts private equity managing entity affiliated with Caydan Capital Partners LLC and co-managed by Wayne Mack and Richard Waldo, has been ordered by the Securities and Exchange Commission to pay a $100,000 civil penalty and cease and desist from future violations of the beneficial ownership reporting rules, following a finding that CPC filed a misleading Schedule 13D with respect to its 9.42% stake in XWELL Inc., a Nasdaq-listed airport wellness company, and then failed to timely amend that filing as its plans evolved into a contested proxy fight and Delaware lawsuit.
CPC disclosed its ownership stake on June 17, 2024 — the same day it sent XWELL management a letter proposing to replace four of the company’s five board members — but the Schedule 13D made no mention of that board replacement plan, describing CPC’s intentions only in vague forward-looking language.
When XWELL rejected the nominations, CPC escalated through two revised proposals, a mutual non-disclosure agreement, and ultimately a lawsuit in the Delaware Court of Chancery on July 19, 2024. CPC did not amend its 13D to disclose any of these material developments until July 22, 2024 — more than two business days after each of those material changes had occurred, in violation of the two-business-day amendment requirement. The SEC issued its cease-and-desist order on May 4, 2026, the same day it settled its much larger Section 13(d) case against Elon Musk’s revocable trust for $1.5M over the Twitter stake disclosure delay.
CPC Filed Its 13D the Same Day It Sent XWELL a Letter to Replace 4 of 5 Board Members
CPC began accumulating XWELL shares in December 2023 and continued through mid-March 2024. By mid-May 2024, CPC had developed a specific strategy: propose a new slate of directors and meet with XWELL’s CEO to discuss, among other options, compelling the current board to resign without going to a shareholder vote. No later than June 4, 2024, CPC began recruiting individuals to serve as potential nominees, reaching out to at least five people before settling on four: Daniel Serpico, Chad Cooper, Matthew Thelen, and Jerry Rosenstock.
On June 5, CPC resumed buying XWELL shares, crossing the 5% threshold on June 10. On June 17, CPC filed its Schedule 13D disclosing a 9.42% beneficial ownership stake. The Item 4 disclosure — which requires filers to describe any plans involving changes to the board — spoke only of general concerns about XWELL’s long-term underperformance and the possibility of future proposals. It stated CPC did not have any “present plan or proposal” to change the board. That same day, CPC sent XWELL a letter proposing to replace four of its five board members. The SEC found those two acts — the filing and the letter — directly contradicted each other, and that the Schedule 13D was materially incomplete at the moment it was submitted.
XWELL Accused CPC of Planning a Take-Under Reverse Merger to Benefit a Failing Affiliate
XWELL’s public response to CPC’s board nominations was pointed. In a July 22, 2024 press release, XWELL stated its belief that CPC was seeking board control not to create shareholder value but to engineer a reverse merger transaction with “one of their underperforming affiliates in the pain and wellness space that has not been monetized via a reverse merger or sale (despite many attempts to do so).” XWELL characterized the potential outcome as a “take-under” that would severely undervalue the company, significantly dilute current stockholders, and siphon value to CPC and its affiliates at the expense of ordinary shareholders.
XWELL operates under multiple brands focused on airport wellness, including XpresSpa, which serves nearly one million travelers annually across airports in the United States, the Netherlands, Turkey, and the UAE. The company also operates XpresCheck biosurveillance centers in airports in partnership with the CDC, the Treat wellness brand, Naples Wax Center, and HyperPointe, a digital healthcare analytics company. Whether CPC’s ambitions were as XWELL described them or represented a legitimate activism campaign, the SEC’s order makes no finding on the strategic merits — its sole concern was the failure to disclose.
After Two Rejected Proposals and a Delaware Lawsuit, CPC Finally Filed Its Late Amendment
The timeline of CPC’s failures to amend its 13D tracks directly with its escalating conflict with XWELL. On June 21, XWELL rejected CPC’s initial board nomination, citing deficiencies. On June 23, CPC sent a revised second proposal. On June 29, XWELL rejected that too. On July 8, the parties entered a mutual non-disclosure agreement and began settlement talks. Each of these developments constituted a material change to the facts CPC had reported in its June 17 Schedule 13D, triggering an obligation to amend within two business days. CPC made no amendments during this period.
On July 19, 2024, settlement talks having failed, CPC filed a verified complaint in the Delaware Court of Chancery against XWELL and five board members, alleging breach of fiduciary duties and unlawful application of the company’s bylaws to reject its nominations. On July 22, CPC finally amended its Schedule 13D, disclosing for the first time the two rejected proposals, the NDA, and the lawsuit. By that point, the amendment was more than two business days late with respect to each material change. CPC voluntarily withdrew its lawsuit and proxy fight on August 9, 2024 through a stipulation of dismissal, stating it would continue to evaluate its strategic options.
The SEC Issued Its Order on the Same Day It Settled the Much Larger Elon Musk 13D Case
The timing of the ACM-CPC cease-and-desist order is notable. May 4, 2026 was also the day the SEC settled its Section 13(d) case against Elon Musk’s revocable trust for $1.5M — the largest penalty ever imposed for a 13(d) disclosure violation — over the 11-day delay in disclosing his 9% Twitter stake in 2022. Issuing two Section 13(d) enforcement actions on the same day underscores the SEC’s consistent attention to the beneficial ownership reporting framework regardless of the size of the entity involved. CPC’s $100,000 penalty reflects the narrower scope of its violation — an incomplete initial disclosure and a late amendment — compared to the broader harm inflicted by the $500M in Twitter purchases Musk made during his disclosure gap. The SEC’s order was issued on the basis of CPC’s offer of settlement without admitting or denying the findings.
Conclusion
The ACM-CPC case illustrates a compliance failure that is surprisingly common in activist investing: a fund develops a concrete plan to change a company’s board, crosses the 5% ownership threshold, files its Schedule 13D describing its intentions in vague language, and then sends the target company a specific board replacement proposal the same day. The gap between what was disclosed to the public and what was communicated privately to the target is precisely what Section 13(d) exists to close. CPC’s $100,000 penalty is modest, but the cease-and-desist order establishes that the SEC is watching activist campaigns not just for the initial crossing disclosure but for the ongoing obligation to amend as campaigns evolve — a compliance lesson that arrives on the same day the SEC collected $1.5M from the world’s wealthiest person for a different version of the same problem.
