(Bloomberg) — A former chief financial officer for blank-check firms pleaded guilty to wire fraud in a scheme to embezzle more than $5 million to trade crypto assets and meme stocks.
(Bloomberg) — A former chief financial officer for blank-check firms pleaded guilty to wire fraud in a scheme to embezzle more than $5 million to trade crypto assets and meme stocks.
Cooper Morgenthau, 35, who was the top financial official at African Gold Acquisition Corp., admitted to the misconduct that spanned about a year starting in June 2021, the US Attorney’s Office for the Southern District of New York said on Tuesday. The Securities and Exchange Commission said that he committed fraud in a separate complaint, and had agreed to a bar from serving as an officer or director of a publicly traded company.
Morgenthau “has admitted that he breached the trust that he owed to his public and private investors, stealing millions of dollars from them to trade meme stocks and cryptocurrencies,” said Damian Williams, the US Attorney for the Southern District of New York, in a statement. Michael Paul Bowen, an attorney for Morgenthau, didn’t immediately respond to messages seeking comment on the allegations.
Morgenthau wired more than $1.2 million of African Gold’s money to his personal accounts, which he then lost trading mostly meme stocks or spent, according to the SEC. Morgenthau then fabricated bank statements to African Gold’s accountants and auditor to cover the hole, the regulator alleged.
To attempt to cover his losses, the SEC said Morgenthau raised about $4.7 million for two other blank-check companies, Strategic Metals Acquisition Corp. I and Strategic Metals Acquisition Corp. II. He used some of that money to cover his losses at African Gold, and then withdrew that money again to trade crypto, according to the SEC’s complaint.
African Gold discovered the withdrawals in August 2022, fired Morgenthau, and disclosed his activity to the SEC. The firm didn’t immediately respond to an emailed request for comment sent outside of normal business hours.
The cases are US v Morgenthau, 23-cr-2, and Securities and Exchange Commission v Morgenthau, 23-cv-22, both in US District Court, Southern District of New York.
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