• A former chief financial officer of several special purpose acquisition companies (SPACs) was sentenced to three years in prison for embezzling more than $5 million from businesses that traded meme stocks and cryptocurrencies.
• Cooper Morgenthau, 36, pleaded guilty to one count of wire fraud for stealing money from African Gold Acquisition Corporation, Strategic Metals Acquisition Corporation I (SMAC I), and Strategic Metals Acquisition Corporation II.
• He used the funds to trade equities and options of cryptocurrencies and so-called meme stocks, but was caught by the US Securities and Exchange Commission.
Former CFO Sentenced To Prison For Crypto Fraud
A former top company executive has been given a three-year prison term on Friday for theft and forfeiting the funds he stole from businesses that traded meme stocks and cryptocurrencies. Cooper Morgenthau, 36, ex-chief financial officer of several special purpose acquisition companies (SPACs), pleaded guilty to one count of wire fraud for embezzling more than $5 million.
Morgenthau’s Scheme
Morgenthau transferred the money from African Gold to his personal accounts. He then used these funds to trade equities and options of cryptocurrencies and so-called meme stocks. The withdrawals were uncovered in August last year at which point the company fired Morgenthau and reported his irregularities to the US Securities and Exchange Commission (SEC).
Sentencing Details
In a federal courtroom in Manhattan, US District Judge Paul Engelmayer sentenced Morgenthau to 36 months in prison along with an equal amount in restitution payments as well as $5.11 million forfeiture earnings from the scheme.
Rise Of SPACs
SPACs are becoming increasingly popular in finance as they allow companies access to capital without going through traditional IPO processes or private equity investments. However, with their rise have come reports of fraud within this industry such as this case involving Morgenthau’s actions.
Greed Is Dangerous
Morgenthau’s crime serves as a reminder that greed for crypto can be dangerous if left unchecked or not regulated properly by authorities such as SEC which is tasked with protecting investors’ interests.