SEC Charges Former SPAC CFO for Orchestrating $5 Million Fraud Scheme

The Securities and Exchange Commission today announced fraud charges against Cooper J. Morgenthau, the former CFO of African Gold Acquisition Corp., a SPAC or special purpose acquisition company, for orchestrating a scheme in which he stole more than $5 million from the company and from investors in two other SPACs that he incorporated.

The SEC’s complaint alleges that, from June 2021 through July 2022, Morgenthau embezzled money from African Gold and stole funds from another SPAC series called Strategic Metals Acquisition Corp. I and II to pay for his personal expenses and to trade in crypto assets and other securities.

According to the SEC’s complaint, Morgenthau concealed unauthorized withdrawals by falsifying African Gold’s bank account statements and then provided those falsified documents to African Gold’s auditor and accountants for purposes of preparing African Gold’s SEC filings. During the same general time period, Morgenthau raised money from Strategic Metals’ investors based on misrepresentations that the money would be used to launch the Strategic Metals SPACs, when in fact Morgenthau misappropriated the money for personal uses, including to conceal his embezzlement of African Gold’s funds.

“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,” said John T. Dugan, Associate Director for Enforcement in the SEC’s Boston Regional Office. “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.”

The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, alleges that 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. 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.

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Morgenthau.