The previous chief monetary officer of a Particular Function Acquisition Firm (SPAC) has been sentenced to a few years in jail after embezzling $5 million he used to commerce cryptocurrencies and "meme shares".
A press of April twenty seventh release by the USA Division of Justice, Cooper Morgenthau, former chief monetary officer of African Gold Acquisition Company (AGAC), mentioned greater than $5 million was embezzled from three completely different SPACs: AGAC, Strategic Metals Acquisition Company I (SMAC I), and Strategic Metals Acquisition Company II between June 2021 and August 2022.
Former Chief Monetary Officer of two SPACs sentenced to 36 months in jail for fraudhttps://t.co/ZOvi2ksEi1
— US Lawyer SDNY (@SDNYnews) April 27, 2023
After In accordance with a associated civil lawsuit filed by the US Securities and Change Fee (SEC), Morgenthau transferred roughly $1.2 million in funds from African Gold to his private accounts and used the funds to commerce cryptocurrency and meme shares and choices. Shares.
He misplaced virtually all of his cash.
After the losses, he supplied African Gold's accountants and a licensed public accountant with cast paperwork earlier than public submitting with the SEC, leading to "materials misstatements" within the firm's public monetary information.
In the meantime, Morgenthau raised a further $4.7 million from non-public traders in a separate SPAC from African Gold, primarily based on fraudulent claims that the cash can be used to begin one other SPAC.
Sadly for traders, Morgenthau used the freshly raised funds to cowl its losses on African Gold and proceed buying and selling cryptocurrencies and meme shares.
On the time, SMAC I used to be within the technique of elevating cash from non-public traders previous to its IPO.
African Gold found the withdrawals in August 2022, fired Morgenthau and notified the SEC of his wrongdoing.
Morgenthau, a Florida resident, pleaded guilty to one count of wire fraud on Jan. 3. In addition to his three-year sentence, he was also awarded a $5.1 million waiver and an additional $5.1 million in damages.
"Today's sentencing of Cooper Morgenthau sent a message to SPAC advocates that fraud in the SPAC markets will be punished and greed will have serious consequences on Wall Street," US Attorney Damian Williams said in the statement.