According to a press release issued on January 3, the Securities and Exchange Commission has filed fraud charges against a CFO who embezzled funds to invest in cryptocurrency.
Cooper J. Morgenthau, the accused, was the CFO of African Gold Acquisition Corp., a special purpose acquisition (SPAC) company that arranged mergers and acquisitions between other companies.
Between June 2021 and July 2022, Morgenthau's entire scheme involved the theft of more than $5 million. He initially stole $1.2 million directly from African Gold, then spent the money on personal expenses. He also traded crypto assets and securities, including “meme stocks,” with the funds.
Morgenthau then attempted to make up for his losses by raising $4.7 million through two SPAC series known as Strategic Metals Acquisition Corp. I and II. However, he quickly re-invested the funds raised in that process in cryptocurrency.
According to previous legal filings, Morgenthau's poor investments and reckless spending caused him to lose all of the stolen funds by August 2022.
Morgenthau is also facing charges from the United States Attorney's Office for the Southern District of New York.
Several other crypto-related cases have been investigated by the SEC in the last year. It settled with BlockFi in February 2022 over an unregistered product. It reached an agreement with Kim Kardashian in October over her support for an ICO.
In parallel charges with the Southern District of New York, the SEC charged FTX associates Caroline Ellison and Gary Wang with fraud in December 2022.
As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!