The Securities and Exchange Commission (SEC) has detailed fraud charges against the former CFO of African Gold Acquisition Corp., alleging special purpose acquisition company (SPAC) embezzlement.
The SEC complaint alleges from June 2021 through July 2022, Cooper J. Morgenthau orchestrated a scheme in which he stole over $5 million from the company and from investors in two other SPACs that he incorporated.
“Our complaint against Morgenthau demonstrates our commitment to holding individuals accountable, particularly when they seek to take advantage of public interest in investment vehicles such as SPACs,” SEC Boston Regional Office Associate Director for Enforcement John T. Dugan said. “Our enforcement team worked swiftly and efficiently to file today’s action in just over four months since it was disclosed, which should serve to deter future bad actors in the SPAC market.”
Per the SEC’s complaint, Morgenthau allegedly concealed unauthorized withdrawals by falsifying African Gold’s bank account statements and provided those falsified documents to African Gold’s auditor and accountants for purposes of preparing African Gold’s SEC filings.
Additionally, the SEC alleges that during the same period, Morgenthau raised money from Strategic Metals’ investors based on misrepresentations that the money would be used to launch the Strategic Metals SPACs – when Morgenthau allegedly misappropriated the money for personal uses.
The SEC’s complaint alleges Morgenthau violated antifraud provisions of the federal securities laws; lied to African Gold’s auditor and accountants in violation of the Securities Exchange Act of 1934; knowingly falsified African Gold’s books and records; and filed false certifications with the SEC.
The SEC indicated Morgenthau consented to a judgment enjoining him from further federal securities laws violations and barring him from serving as an officer or director of a publicly traded company, with monetary remedies to be determined at a later date.