A former executive at a pair of special purpose acquisition companies (SPACs) admitted to embezzling more than US$5 million from the companies, which he used to trade “meme stocks” and crypto.
Cooper Morgenthau, who was chief financial officer for two SPACs — African Gold Acquisition Corp. and Strategic Metals Acquisition Corp. I and II — pleaded guilty to one count of wire fraud in connection with allegations that he diverted millions of dollars from the companies that he then lost trading meme stocks and crypto, according to the allegations brought by the U.S. Department of Justice (DoJ).
At the same time, the U.S. Securities and Exchange Commission (SEC) filed civil fraud charges against Morgenthau, alleging that he violated federal securities laws, lied to African Gold’s auditor, falsified African Gold’s books and records, and filed false certifications with the SEC.
“According to the SEC’s complaint, Morgenthau concealed unauthorized withdrawals by falsifying African Gold’s bank account statements and then provided those falsified documents to African Gold’s auditor and accountants for purposes of preparing African Gold’s SEC filings,” the regulator alleged.
The SEC said that Morgenthau then “raised money from Strategic Metals’ investors based on misrepresentations that the money would be used to launch the Strategic Metals SPACs, when in fact Morgenthau misappropriated the money for personal uses, including to conceal his embezzlement of African Gold’s funds.”
In that case, Morgenthau consented to a judgment that bans him from serving as an officer or director of a public company, with “monetary remedies to be determined at a later date,” the SEC said.
As part of the guilty plea, Morgenthau agreed to forfeit US$5.1 million and pay US$5.1 million in restitution. He is scheduled to be sentenced on April 25.