Ex-SPAC CFO pleads guilty to plan to trade meme stocks, crypto

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(Bloomberg) — A former chief financial officer of blank check firms has pleaded guilty to fraud in a scheme to siphon off more than $5 million for trading in crypto assets and meme stocks.

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Cooper Morgenthau, 35, the chief financial officer at African Gold Acquisition Corp., admitted the wrongdoing, which spanned about a year and began in June 2021, the US Attorney’s Office for the Southern District of New York said Tuesday. The Securities and Exchange Commission said in a separate complaint he committed fraud and agreed to a ban from serving as an officer or director of a public company.

Morgenthau “admitted that he violated the trust he owed his public and private investors by stealing millions of dollars from them to trade meme stocks and cryptocurrencies,” said Damian Williams, the U.S. Attorney for the District of Columbia. Southern New York, in a statement. Michael Paul Bowen, an attorney for Morgenthau, did not immediately respond to messages seeking comment on the allegations.

Morgenthau transferred more than $1.2 million from African Gold funds to his personal accounts, which he then lost or spent trading mostly meme stocks, according to the SEC. Morgenthau then fabricated bank statements to African Gold’s accountants and auditors to cover the hole, the regulator claimed.

To try to cover its losses, the SEC said Morgenthau collected about $4.7 million for two other blank check companies, Strategic Metals Acquisition Corp. I and Strategic Metals Acquisition Corp. II. According to the SEC complaint, he used some of that money to cover his losses on African Gold and then withdrew that money back into crypto trading.

African Gold discovered the withdrawal in August 2022, fired Morgenthau and disclosed his activities to the SEC. The company did not immediately respond to an emailed request for comment, which was sent outside normal business hours.

The cases are US v. Morgenthau, 23-cr-2, and Securities and Exchange Commission v. Morgenthau, 23-cv-22, both in the US District Court, Southern District of New York.

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