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SEC Says Gold Mining SPAC Ex-CFO Orchestrated $5M Fraud Scheme

Aerial shot of a large bucket wheel excavator excavating soil in an open pit lignite mine in Germany at sunset.

According to court records, Cooper Morgenthau has pled guilty to embezzling funds from the three SPACs he founded. For violating the Securities Act and the Exchange Act, the Securities and Exchange Commission sought, and the judge granted, a permanent injunction against his future involvement in the running of or trading in any publicly traded company. Future proceedings will cover what compensatory and statutory damages are owed.

In October 2020, Morgenthau and others incorporated African Gold Acquisition Corp., an SPAC seeking to purchase a gold mining company with Morgenthau as the Chief Financial Officer. But up until his termination in August 2022, he reportedly took funds from the company to pay for his own trading of meme stocks and eventually crypto asset securities. He lost all of said money.

According to court documents, he extracted approximately $1.2 million from African Gold’s bank account to fund his trading. Throughout 2021, he allegedly falsified financial documents to hide his theft. However, when it was time for African Gold’s accountant to thoroughly audit the company’s finances, he created a pair of SPACs called Strategic Metals Acquisition Corp. I and Strategic Metals Acquisition Corp. II (together, Strategic Metals) to refund the money he stole. Just before the audit, he transferred $544,103.39 from Strategic Metals to “correct” African Gold’s balance sheets. The rest of Strategic Metals’ money, and eventually that initial deposit were used to pay African Gold’s business expenses and Morgenthau’s own personal expenses.

For his false statements to investors and his false quarterly filings, Morgenthau stands accused, and plead guilty to, five combined counts of violating the Securities Act and the Exchange Act. He is permanently barred from participating in the operation or trading of any publicly traded company.

The case is set in the Southern District of New York, where Morgenthau resides. All three companies are incorporated in the Cayman Islands.

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