Litigation Release No. 25605 / January 4, 2023
Securities and Exchange Commission v. Cooper J. Morgenthau, Civil Action No. 1:23-cv-00022 (S.D.N.Y. filed Jan. 3, 2023)
The Securities and Exchange Commission announced on January 3, 2023, 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.
The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, alleges that Morgenthau violated Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1, 13b2-2(a) and (b), and 13a-14 thereunder and Section 17(a) of the Securities Act of 1933. 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, on January 3, 2023, the U.S. Attorney’s Office for the Southern District of New York announced criminal charges against Morgenthau.
The case is being led by David D’Addio, Anne Hancock, Ryan Murphy, and Amy Gwiazda of the Boston Regional Office. The SEC appreciates the assistance from the United States Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation.