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Former Nanotech Firm CEO Charged with Fraud over Fictitious Cancer Detector

James Barbera allegedly told investors that his firm had a NASA-developed breathalyzer that could detect cancer and narcotics.
By Michael Katz


The founder and former CEO of a New York-based nanotechnology company has been arrested on securities fraud and wire fraud charges related to an alleged scheme that defrauded investors of more than $12 million.

The Southern District of New York (SDNY), the FBI, and the Securities and Exchange Commission (SEC) have accused James Barbera, the founder and former CEO of privately held Nanobeak, of fraudulently inducing dozens of investors to invest based on false and misleading statements.

According to the allegations in a complaint that was unsealed in federal court last week, Barbera falsely told investors that Nanobeak had developed a breathalyzer sensor based on NASA technology that could detect cancer and narcotics in human breath. However, the complaint said, NASA never developed such a technology, never conducted research for Nanobeak, and did not have an exclusive license deal with the company. In fact, research related to narcotics testing is prohibited at NASA facilities.

“As alleged, James Barbera defrauded investors out of millions of dollars by offering the opportunity to invest in a seemingly plausible but wholly fictitious technology, purportedly developed in coordination with NASA,” acting Manhattan US Attorney Audrey Strauss said in a statement.

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Barbera also allegedly lied to potential and actual investors, telling them that institutional investors, including a large publicly traded chemical company, had made substantial investments in Nanobeak, when in fact the chemical company had never invested in the firm. Additionally, he allegedly falsely represented to investors that the company was close to launching an initial public offering (IPO), which he said would provide them with large profits.

Barbera is also accused of using some of the ill-gotten money to pay for his personal expenses, such as private school and college tuition for his children, mortgage payments on his Manhattan apartment on Central Park West, and other personal items, such as credit card bills, jewelry, automobiles, and living expenses.   

Barbera, 64, was charged with one count of securities fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison. He was also charged with one count of conspiracy to commit securities fraud and wire fraud, which carries a maximum sentence of five years in prison.  The charges carry a maximum fine of $5 million, or twice the gross gain or loss from the offenses. 

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Home > News > Pensions > Nest to Reduce Carbon in its Growing Emerging Market Strategy
Pensions

Nest to Reduce Carbon in its Growing Emerging Market Strategy

The UK-based pension fund will drill down on renewable energy in the strategy, which will roughly double next year. 
By Sarah Min


The National Employment Savings Trust (Nest) will nearly double its emerging market allocation while also reducing the strategy’s carbon footprint, the fund said Tuesday.

The UK-based pension plan will increase its emerging market assets to US$1.2 billion by February, or about 6% of its $19.4 billion portfolio, according to the fund. At the moment, the pension fund had just $639.7 million devoted to the strategy, or just 3.5% of its total assets.

At the same time, the pension fund said it will reduce investments in companies with large oil and gas reserves, while also increasing funding into clean and renewable investments.  

Nest will incorporate environmental, social, and governance (ESG) strategies into the allocation to assess investments based on three criteria: energy efficiency, alternative energy, and green building. A customized index produced with Northern Trust Asset Management (NTAM) will score the companies in its portfolio. 

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“Emerging markets are an exciting growth area, and we believe we can continue to successfully invest while working towards our net-zero goal,” Nest’s Head of Responsible Investment Diandra Soobiah said in a statement. 

The British pension fund joins other institutional investors looking to the emerging market sector for greater returns amid historically low interest rates. Some nations, such as China and India, are expected to grow their urban centers over the next two decades, thanks to a rising middle class and a greater number of young people. 

But Nest is also pledging to focus on cleaner energy in countries that are still heavily dependent on “dirtier” fossil fuels. In countries like China, India, and other emerging market nations, experts say fossil fuels such as coal are still expected to play a large role in the energy landscape, even as a growing number of allocators are pledging to divest of fossil fuels altogether. Coal is cheaper than other alternative sources of fuel. 

Still, Nest is betting that clean energy will surge in emerging markets, and will reward members over the long term with sustainable returns: 

“Many emerging economies are also thinking hard about how to harness green technology to fuel their growth and leapfrog the dirtier industrialization trends of the past. This presents opportunities for investors,” Soobiah added.

Other institutional investors are betting on clean fuels. Earlier this year, the Canada Pension Plan Investment Board (CPPIB) said it doubled down on renewable energy firms in 2020 to C$6.6 billion (US$5.2 billion). 

Nest is reputed for its focus on sustainability. By February, the climate strategy in its emerging market portfolio will bring the fund’s climate investment strategies up to 51% of the total portfolio, up from 45% in July when the fund pledged to align with the Paris Agreement. Nest said it will halve the carbon emissions in its portfolio within 10 years and achieve net zero by 2050. 

Divestment is an ESG strategy the pension fund’s CIO, Mark Fawcett, has advocated for in the past as a last resort for when active engagement has failed, or when an asset is deemed inappropriate for the plan. In the past, Nest said it would divest its portfolio of thermal coal, oil sands, and arctic drilling by 2025. In June 2019, it said it would cut tobacco companies from its portfolios, a goal a spokesperson for the fund said has been completed this year. 

As the largest workplace pension fund in the UK, it also has some teeth; Nest represents nearly a quarter of the UK’s labor force with more than 9.5 million members. 

“It’s crucial that investors in such a strategy are active stewards for companies in emerging markets,” Soobiah said in a statement. “We’ll encourage companies to prepare for the low-carbon transition to ensure they remain attractive investments for our members.”

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