The U.S. Securities and Trade Fee has filed fraud expenses towards a CFO who embezzled funds to spend money on crypto, in line with a Jan. 3 press launch.
The accused — Cooper J. Morgenthau — served as CFO of African Gold Acquisition Corp., which acted as a particular goal acquisition (SPAC) firm that organized mergers and acquisitions between different firms.
Morgenthau’s whole scheme concerned the theft of greater than $5 million between June 2021 and July 2022. He initially embezzled $1.2 million of funds instantly from African Gold, then spent the stolen funds on private bills. He additionally used the funds to commerce crypto belongings and securities together with “meme shares.”
Morgenthau then tried to cowl his losses by elevating $4.7 million by means of two SPAC sequence known as Strategic Metals Acquisition Corp. I and II. Nevertheless, he quickly invested the cash raised in that course of in cryptocurrency as soon as once more.
Morgenthau’s poor investments and unrestrained spending led him to lose the entire stolen funds by August 2022, in line with earlier authorized filings.
The SEC asserts that Morgenthau particularly violated antifraud provisions of federal securities legal guidelines. He lied to auditors and accountants, falsified data at African Gold, and filed false certifications with the SEC. He shall be barred from serving in sure government positions and faces monetary penalties that are nonetheless pending.
The U.S. Legal professional’s Workplace for the Southern District of New York has additionally introduced parallel expenses towards Morgenthau.
The SEC has carried out a number of different instances associated to crypto over the previous yr. In February 2022, it settled with BlockFi over an unregistered product. In October, it settled with Kim Kardashian over her endorsement of an ICO.
In December 2022, the SEC charged FTX associates Caroline Ellison and Gary Wang with fraud in parallel expenses with the Southern District of New York.
