Ex-CFO Pleads Guilty to Stealing From SPACs in Order to Trade Meme Stocks and Cryptocurrencies

NEW YORK (Reuters) - The U.S. A former chief financial officer of several special purpose acquisition companies (SPACs) has pled guilty to stealing over $5 million from them and losing almost all of it trading meme stocks and cryptocurrencies.

Cooper Morgenthau, 35, of Fernandina Beach, Florida, pled guilty to one count of wire fraud in Manhattan federal court on Tuesday before U.S. District Judge Paul Engelmayer.

Morgenthau faces a probable prison term of six to seven and a half years under proposed federal guidelines during his April 25 sentencing.

He also agreed to forfeit $5.11 million and pay an equivalent amount in restitution, as well as resolve related civil allegations brought by the Securities and Exchange Commission in the United States.

Morgenthau's lawyer, Michael Bowen, refused to comment.

According to authorities, Morgenthau stole more than $1.2 million from African Gold Acquisition Corp between June 2021 and August 2022, covered the fraud by manipulating its account statements, and spent or lost all of it in securities trading.

Morgenthau then solicited $4.7 million from investors in Strategic Metals Acquisition Corp SPACs to offset his losses, only to lose the majority of it via crypto trading, according to the SEC.

African Gold, incorporated in New York and formed to acquire a gold mining company, raised $414 million in an initial public offering in February 2021.

According to the SEC, Morgenthau was sacked in August after he ran out of money and suppliers refused to work for the firm.

African Gold said at the time that it fired Morgenthau after discovering his “improper withdrawals” and efforts to hide them.

Morgenthau “accepted that he betrayed the trust that he owed to his public and private investors” by pleading guilty, said U.S. Attorney Damian Williams in Manhattan in a statement.

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