Cooper Morgenthau took $5 million from three companies and used most of it to buy cryptocurrencies and “meme stocks.” He did something wrong by taking the money and lost almost all of it.
The Department of Justice (DOJ) said on April 27 that Cooper Morgenthau used to work as a CFO at African Gold Acquisition Corp. (AGAC). He took more than $5 million from three different companies (AGAC, Strategic Metals Acquisition Corp I (SMAC I), and Strategic Metals Acquisition Corp II (SMAC II)) between June 2021 and August 2022.
Former chief financial officer of two SPACs sentenced to 36 months in prison for fraud schemehttps://t.co/ZOvi2ksEi1
— US Attorney SDNY (@SDNYnews) April 27, 2023
The U.S. Securities and Exchange Commission (SEC) filed a complaint related to this case. The complaint says that Morgenthau transferred around $1.2 million from African Gold to his own personal bank accounts. He used that money to buy and sell cryptocurrencies, options and meme stocks, but he lost almost all of it.
After losing the money, Morgenthau lied to the accountants and auditor at African Gold by giving them fake documents. The lies made the company’s public financial records wrong. Later, Morgenthau cheated private investors by telling them he would use their money to start another SPAC. But he used the money for himself.
The investors were not lucky because Morgenthau did not use their money for starting another SPAC. Instead, he used the money to make up for the money he lost at African Gold. He also kept trading cryptocurrencies and meme stocks with that money.
SMAC I was getting ready to ask people for money before it became a public company. Meanwhile, African Gold found out that Morgenthau had taken their money and fired him in August 2022. African Gold also told the SEC about what Morgenthau had done wrong.
Morgenthau lives in Florida. On January 3, he admitted to doing wire fraud. He got a three-year prison sentence and was told to give up $5.1 million. He also has to pay back another $5.1 million to the people he took the money from.
The U.S. Attorney, Damian Williams, said that by punishing Cooper Morgenthau, they are telling SPAC promoters that if they do something wrong, they will get in trouble. He also said that if people are too greedy on Wall Street, they will face serious consequences.
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