SEC v. Cooper J. Morgenthau, No. 1:23-cv-00022, Southern District of New York (Jan. 4, 2023) — Complaint

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

________________________________________________
        :
SECURITIES AND EXCHANGE COMMISSION, :
        :
     Plaintiff,   :
        :
v. : No. 23 Civ. 00022
:
COOPER            J.            MORGENTHAU,                                                :            JURY            TRIAL
        : DEMANDED
     Defendant.  :
________________________________________________:

COMPLAINT

 Plaintiff Securities and Exchange Commission (the “Commission”), for its Complaint
against defendant Cooper J. Morgenthau (“Morgenthau”), alleges as follows:
PRELIMINARY STATEMENT

1. From  at  least  June  2021  through  at  least  July  2022  (the  “Relevant  Period”),
defendant  Morgenthau  stole  more  than  $5  million  from  his  employer,  a  publicly-traded  special
purpose acquisition company (“SPAC”), and from investors in two companies that Morgenthau
incorporated for the purpose of becoming SPACs.  Morgenthau used the stolen funds to cover his
personal expenses and his trading in so-called meme stocks and crypto asset securities.
2. Morgenthau  was  the  Chief  Financial  Officer  of  African  Gold  Acquisition  Corp.
(“African Gold”), a SPAC seeking to acquire a company in the gold mining industry.  During the
Relevant  Period,  Morgenthau  wired  more  than  $1.2  million  of  African  Gold’s  money  to  his
personal bank and brokerage accounts.  He used the money primarily to trade options on meme
stocks, i.e., stocks that gained large online and social media followings among retail investors.

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3. To avoid detection, Morgenthau doctored African Gold’s monthly bank statements
by,  for  example,  deleting  his  unauthorized  transactions  and  overstating  the  available  account
balance  in  any  given  month  by  as  much  as  $1.19  million.    Morgenthau  then  emailed  these
fabricated bank statements to African Gold’s accountants and auditor, along with letters falsely
attesting  that  he  was  unaware  of  any  fraud  at  African  Gold  and  that  the  company  had  properly
recorded  in  the  company’s  books  and  records  all  material  transactions.    Morgenthau  knew  that
African Gold’s accountants and auditor would rely on his falsified bank statements and his false
assurances  in  those  letters  to  prepare  financial  statements  that  were  incorporated  into  African
Gold’s  quarterly  and  annual  reports  filed  with  the  Commission.    Because  of  Morgenthau’s
fraudulent  scheme,  those  publicly  filed  reports  contained  materially  false  and  misleading
statements  regarding  African  Gold’s  financial  condition  and  other  matters.    Morgenthau  signed
those  reports  and  attested  to  their  accuracy  in  certifications  filed  with  the  Commission,  while
knowing that the reports contained materially false and misleading information because of his own
fraud.
4. Morgenthau either spent or lost through securities trading all of the money he stole
from African Gold.  To cover his losses, Morgenthau raised money by soliciting investors to help
launch  another  series  of  SPACs:    Strategic  Metals  Acquisition  Corp.  I  and  Strategic  Metals
Acquisition Corp. II (together, “Strategic Metals”).  From at least July 2021 through at least July
2022,  Morgenthau  raised  approximately  $4.7  million  from  investors  in  Strategic  Metals,  all  of
which he misappropriated for himself.
5. Morgenthau  deposited  some  of  the  money  he  raised  for  Strategic  Metals  into
African  Gold’s  bank  account  in  order  to  conceal  his  embezzlement  from  African  Gold  and  its
accountants and auditor.  For example, Morgenthau deposited more than half a million dollars of

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Strategic Metals’ funds into African Gold’s bank account on December 31, 2021, because he knew
that African Gold’s auditor would confirm the account balance as of that date, in connection with
African  Gold’s  year-end  audit.  Almost  immediately  thereafter,  Morgenthau  began  withdrawing
the money from African Gold’s bank account and used most of it to trade crypto asset securities.
Morgenthau periodically deposited just enough money in African Gold’s bank account to cover
certain  essential  business  expenses,  such  as  fees  for  the  company’s  lawyers,  accountants,  and
auditor, so that his theft would remain undetected.
6. But by August 2022, Morgenthau had run out of money.  The bank accounts for
African Gold and Strategic Metals were empty.  African Gold vendors refused to perform work
for  the  company,  and  Morgenthau’s  scheme  was  exposed.    African  Gold  fired  Morgenthau  on
August 26, 2022.
7. By knowingly or recklessly engaging in the conduct described in this Complaint,
Morgenthau violated, and unless restrained and enjoined will continue to violate, Section 17(a) of
the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77q(a)], Sections 10(b) and 13(b)(5)
of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78j(b), 78m(b)(5)] and
Rules  10b-5,  13b2-1,  13b2-2(a)  and  (b),  and  13a-14  thereunder  [17  C.F.R.  §§  240.10b-5,
240.13b2-1, 240.13b2-2(a) and (b),  and 240.13a-14].
NATURE OF PROCEEDING AND RELIEF SOUGHT
8. The  Commission  seeks  a  permanent  injunction  against  the  Defendant,  enjoining
him from engaging in the transactions, acts, practices, and courses of business of the type alleged
in this Complaint; disgorgement of all ill-gotten gains from the unlawful conduct set forth in this
Complaint,  together  with  prejudgment  interest;  civil  penalties  pursuant  Section  20(d)  of  the
Securities  Act  [15  U.S.C.  §77t(d)]  and/or  Section  21(d)(3)  of  the  Exchange  Act  [15  U.S.C.

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§78u(d)(3)]; an order prohibiting the Defendant from acting as an officer or director of any issuer
that  has  a  class  of  securities  registered  pursuant  to  Section  12  of  the  Exchange  Act  [15  U.S.C.
§ 781], or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.SC.
§ 78o(d)] and such other relief as the Court may deem just and appropriate.
JURISDICTION AND VENUE
9. This  Court  has  jurisdiction  over  this  action  pursuant  to  Section  22(a)  of  the
Securities  Act  [15  U.S.C.  §  77v(a)]  and  Sections  21(d),  21(e),  and  27  of  the  Exchange  Act  [15
U.S.C.  §§  78u(d),  78u(e),  and  78aa].    The  Defendant  has  directly  or  indirectly  made  use  of  the
means or instrumentalities of interstate commerce, or of the mails, or the facilities of a national
securities  exchange  in  connection  with  the  acts,  practices,  transactions,  and  courses  of  business
alleged in this Complaint.
10. Venue in this District is proper under Section 22(a) of the Securities Act [15 U.S.C.
§  77v(a)]  and  Section  27  of  the  Exchange  Act  [15  U.S.C.  §  78aa]  because  during  the  Relevant
Period, the Defendant lived in this District; African Gold’s principal place of business was in this
District;  Strategic  Metals’  principal  place  of  business  was  in  this  District;  and  the  Defendant’s
conduct constituting the violations alleged in this Complaint occurred largely in this District.
DEFENDANT
11. Cooper J. Morgenthau, 35, is a resident of New York, New York.  Morgenthau
served  as  African  Gold’s  CFO  from  October  2020  until  August  26,  2022,  when  he  was  fired.
Morgenthau is the CFO of Strategic Metals Acquisition Corp. I and Strategic Metals Acquisition
Corp II.

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RELEVANT ENTITIES
12.   African Gold Acquisition Corp. is a publicly traded SPAC incorporated in the
Cayman  Islands  with  its  principal  place  of  business  in  New  York,  New  York.    African  Gold’s
securities  are  registered  with  the  Commission  pursuant  to  Section  12(b)  of  the  Exchange  Act.
African Gold is listed on the New York Stock Exchange under the symbols AGAC.U, AGAC, and
AGAC.W.    African  Gold  is  searching  for  a  company  to  acquire.    According  to  the  terms  of  its
prospectus, African Gold has until March 2, 2023, to acquire a company, absent an extension.
13. Strategic  Metals  Acquisition  Corp.  I  (“Strategic  Metals  I”)  is  a  company
incorporated  in  the  Cayman  Islands  for  the  purpose  of  becoming  a  publicly  traded  SPAC.
Morgenthau is the CFO of Strategic Metals I.  Strategic Metals I never completed its initial public
offering of securities.
14. Strategic Metals Acquisition Corp. II (“Strategic Metals II”) is also a company
incorporated  in  the  Cayman  Islands  for  the  purpose  of  becoming  a  publicly  traded  SPAC.
Morgenthau is the CFO of Strategic Metals II.  Strategic Metals II never completed its initial public
offering of securities.
FACTUAL ALLEGATIONS
15. Cooper   Morgenthau   was   African   Gold’s   Chief   Financial   Officer   from   the
company’s incorporation in October 2020, until he was fired in August 2022.  As a SPAC, African
Gold has no operations, other than searching for a company to acquire.  During the Relevant Period,
African Gold’s only employees were its Chief Financial Officer (Morgenthau), Chief Executive
Officer, and Chief Operating Officer.  As a publicly traded company, African Gold is managed by
a board of directors.

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16.  African Gold’s stock began trading publicly on the New York Stock Exchange on
February 26, 2021.  Its initial public offering of securities raised approximately $414 million from
investors, all of which was placed in a trust account to which Morgenthau did not have access.
But Morgenthau did have access to African Gold’s  operating  bank  account,  which  immediately
after  the  initial  public  offering  of  securities,  held  approximately  $1.5  million.    This  money  was
intended  to  fund  African  Gold’s  efforts  to  identify  and  acquire  a  company  in  the  gold  mining
industry.    As  African  Gold’s  CFO,  Morgenthau  had  authority  to  make  deposits  into  and
withdrawals from this bank account to further African Gold’s efforts to acquire such a company.
Morgenthau Embezzled African Gold’s Funds.
17. On June 4, 2021, Morgenthau transferred $36,700 from the African Gold operating
bank account to one of his personal brokerage accounts to fund trading in meme stocks.  Similarly,
on June 15, 2021, Morgenthau transferred $25,000 from the African Gold operating bank account
to his own checking account for personal expenses wholly unrelated to African Gold.  These were
the first in a series of 34 withdrawals that Morgenthau made during June and July 2021, each below
a $50,000 threshold that would have triggered secondary review and approval by an African Gold
board  member.    In  all,  Morgenthau  transferred  more  than  $1.2  million  during  this  time  to  his
personal bank and brokerage accounts, leaving African Gold with just $100 in its operating bank
account by July 29, 2021.
18. To hide this theft from African Gold and from the company’s external accountants
and  auditor,  Morgenthau  falsified  the  company’s  monthly  operating  bank  account  statements,
deleting all references to his unauthorized withdrawals and falsifying the month-end balances and

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other  transactional  information.
1
    For  example,  Morgenthau  erased  $1,150,200  in  unauthorized
transfers into his checking and brokerage accounts from African Gold’s June 30, 2021 operating
bank  account  statement.    Portions  of  African  Gold’s  actual  June  2021  operating  bank  account
statement and Morgenthau’s falsified statement are below.  Falsified information is highlighted:
Actual June 30, 2021 Bank Statement

Falsified June 30, 2021 Bank Statement

1
 As a SPAC with limited operations and few employees, African Gold did not have an internal
finance department and instead outsourced the majority of its financial reporting functions to
external accountants during the Relevant Period.  Similarly, African Gold did not have an
internal audit department and hired an external auditor to conduct all reviews and audits of its
financial statements.

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Morgenthau Lied to African Gold’s Accountants and Auditor.
19. Morgenthau  emailed  the  falsified  monthly  operating  bank  account  statements  to
African Gold’s accountants each quarter.  He did so knowing that the accountants would rely on
these falsified statements to generate and maintain African Gold’s books and records, and compile
the financial statements that the company incorporated into its quarterly and annual reports filed
with the Commission and made available to the investing public.  As a result, African Gold’s books
and  records  contained  material  errors  and  omissions,  as  did  the  company’s  financial  statements
derived from those books and records.
20. Morgenthau  also  emailed  these  falsified  operating  bank  account  statements  to
African Gold’s auditor, knowing that the auditor would rely on them to conduct quarterly reviews
of  African  Gold’s  financial  statements  and  an  annual  audit  of  those  financial  statements.    In
connection with those quarterly reviews and the annual audit, Morgenthau provided several letters
to  African  Gold’s  auditor  falsely  attesting  that  all  material  transactions  “have  been  properly
recorded in the accounting records underlying the . . . financial statements.”  He further claimed
he  had  “no  knowledge  of  any  fraud  or  suspected  fraud  affecting  the  Company  involving:
a. management; b. employees who have significant roles in internal control; or c. others where the
fraud  could  have  a  material  effect  on  the  .  .  .  financial  statements.”    Morgenthau  made  these
misrepresentations to the auditor in a series of letters dated August 16, 2021; November 22, 2021;
April 15, 2022; and May 16, 2022.  Every time he made these statements, Morgenthau knew they
were  false  and  misleading,  and  he  knew  that  the  auditor  would  rely  on  them  in  reviewing  and
auditing African Gold’s periodic financial statements.

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Morgenthau Made False Filings with the Commission.
21.    As   a   publicly   traded   company   whose   securities   were   registered   with   the
Commission, African Gold was required to file periodic reports with the Commission, including
annual (Forms 10-K) and quarterly (Forms 10-Q) reports.  African Gold was required, among other
things, to include financial statements in its quarterly and annual reports that accurately and fairly
reflected its financial condition.  Once filed, African Gold’s periodic reports and accompanying
financial statements became available to the investing public.
22. As African Gold’s CFO, Morgenthau was responsible for reviewing and approving
the company’s financial statements and its quarterly and annual reports.  Morgenthau signed each
of African Gold’s quarterly and annual reports before they were filed with the Commission.  He
also signed certifications under the Sarbanes-Oxley Act of 2002, attesting that, among other things:
(a)  each  report  did  not  include  any  material  misstatements  or  omissions;  (b)  each  report  fairly
presented,  in  all  material  respects,  African  Gold’s  financial  condition  for  that  period;  and
(c)  Morgenthau  disclosed  to  African  Gold’s  auditor  and  the  audit  committee  of  African  Gold’s
board  of  directors  any  fraud  involving  management  with  a  significant  role  in  African  Gold’s
internal  control  over  financial  reporting.    Despite  those  certifications,  Morgenthau  knew  that
African Gold’s periodic reports materially misstated the company’s financial condition, beginning
in the second quarter of fiscal year 2021 (the quarter ended June 30, 2021) and continuing through
the first quarter of 2022 (the quarter ended March 31, 2022) and that those material misstatements
were the result of Morgenthau’s own fraud, which he reported to no one.  Moreover, Morgenthau
knew that the quarterly and annual reports contained other false statements about African Gold’s
internal controls, use of working capital, and other matters.

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23. Regarding the company’s financial condition, for example, African Gold reported
in its Form 10-Q for the second quarter of 2021 (the quarter ended June 30, 2021) that it held $1.3
million  in  cash  that  it  could  use  to  search  for  a  company  to  acquire.    Because  of  Morgenthau’s
theft, however, African Gold held only $101,303, and thus overstated its cash holdings in its Form
10-Q by more than 1,100 percent.  Similarly, in its Form 10-Q for the third quarter of 2021 (the
quarter  ended  September  30,  2021),  African  Gold  reported  $932,771  in  cash.    But  in  reality,
African Gold held only $104,371 in cash because of Morgenthau’s theft, and thus overstated its
cash holdings in its Form 10-Q by more than 793 percent.
2

24. During this time, Morgenthau used the money he stole from African Gold primarily
to trade options contracts for meme stocks in his personal accounts.  His trading strategy was not
successful; he quickly lost all of the stolen funds that he invested.
25. Near  the  end  of  the  fourth  quarter  of  2021  (quarter  ended  December  31,  2021),
African  Gold’s  bank  account  should  have  held  $544,103  according  to  Morgenthau’s  falsified
operating bank account statements, but in reality the bank account instead held a negative balance
of $5,042 because of Morgenthau’s theft.  Morgenthau knew that African Gold’s auditor would
confirm directly with the bank the actual account balance as of December 31, 2021, as a part of its
year-end audit.  Morgenthau also knew that if the auditor discovered that the account was missing
more  than  half  a  million  dollars,  his  scheme  would  unravel.    So  on  December  30,  2021,
Morgenthau emailed at least seven investors in Strategic Metals, telling them that he “urgently”
needed additional funding by the next business day in order for the underwriters to start marketing

2
 As noted, Morgenthau had drained all but $100 of African Gold’s cash by July 29, 2021.
Thereafter he periodically deposited funds that he had fraudulently raised from Strategic Metals’
investors into the African Gold bank account in order to cover certain essential business
expenses, including payments to African Gold’s lawyers, accountants, and other service
providers, and thereby prevent discovery of his theft.

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the SPACs prior to their initial public offerings of securities.  He offered these investors additional
founder  shares  and  private  placement  warrants  issued  by  Strategic  Metals  if  they  immediately
increased  their  investments  in  the  SPACs.
3
    Morgenthau’s  statements  to  investors  in  Strategic
Metals about the purpose of these funds were false and misleading.  Morgenthau “urgently” needed
the investors’ money not to start marketing Strategic Metals, but to temporarily cover up his theft
from African Gold and deceive its auditor in connection with its year-end audit.  Through these
false statements, Morgenthau raised approximately $625,000 from Strategic Metals’ investors on
December 30 and December 31, 2021.   At Morgenthau’s direction, investors sent the funds to one
of Strategic Metals’ bank accounts.  Morgenthau immediately transferred the entire $625,000 from
that Strategic Metals account to various personal accounts, and then transferred $549,145.73 from
his  personal  checking  account  to  African  Gold’s  operating  bank  account.    As  a  result,  African
Gold’s year-end account balance was $544,103.39—the exact amount needed to match the year-
end  balance  according  to  Morgenthau’s  falsified  bank  statements.    Portions  of  African  Gold’s
actual December 2021 operating bank account statement and Morgenthau’s falsified statement are
below.  Falsified information is highlighted:
Actual December 31, 2021 Bank Statement

3
 Founder shares refer to Class B shares initially purchased in private placement offerings; they
convert to Class A shares (i.e., those issued to the public in an initial offering) if and when the
SPAC completes its acquisition of a company.

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Falsified December 31, 2021 Bank Statement

26. The $544,103.39 did not stay in African Gold’s operating bank account very long.
On January 3, 2022—the first business day of the new year—Morgenthau began withdrawing the
money he had deposited just days before, transferring approximately $401,000 on that day alone
from  the  African  Gold  operating  bank  account  to  his  personal  bank  accounts.    He  continued  to
withdraw funds from the African Gold operating bank account over the next few days, sending the
money to himself to fund his trading in crypto asset securities.  By the end of the month, the African
Gold operating bank account held only $13.
27. Throughout  much  of  2022,  Morgenthau  occasionally  deposited  funds  into  the
African  Gold  operating  bank  account.    All  of  those  funds,  however,  came  from  Morgenthau’s
ongoing  Strategic  Metals  fraud  scheme.    While  Morgenthau  was  stealing  money  from  African
Gold,  he  was  simultaneously  and  fraudulently  raising  millions  of  dollars  from  more  than  50
investors to launch the Strategic Metals SPACs.  This fraud scheme is described in greater detail
below.  Morgenthau used most of the money he raised for Strategic Metals to fund his trading in
crypto  asset  securities  and  pay  for  personal  expenses.    But  he  also  funneled  some  of  Strategic
Metals’ money into African Gold’s operating bank account in order to pay certain essential African
Gold business expenses—money owed to African Gold’s accountants, lawyers, and auditor, for
example—and thereby hide or delay the discovery of his theft.  Despite these occasional deposits,

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the African Gold operating bank account ran a negative average balance every month from March
2022  through  Morgenthau’s  termination  in  August  2022.      Throughout  this  time,  Morgenthau
continued to falsify bank statements that he provided to African Gold’s accountants and auditor in
order to hide his theft.
28. As  a  result,  Morgenthau  caused  African  Gold  to  materially  misrepresent  its
financial condition to investors throughout much of 2021 and well into 2022.  Misstatements in
African  Gold’s  financial  statements  relating  to  its  reported  cash  balance  are  summarized  in  the
table below.

Q2 FY 2021 Q3 FY 2021 Q4 FY 2021 Q1 FY 2022
Reported Cash $1,251,503 $932,771 $544,103 $432,819
Actual Cash $101,303 $104,371 $544,103
4
                     $(1,761)
Overstatement                      $1,150,200                      $828,400                        $                      -                      $434,580
Overstatement as % of
Actual Cash (Absolute
Value)                                      1135.4%                                      793.7%                                      0.0%                                      24671.2%
29. Morgenthau also caused African Gold to misrepresent the sufficiency of its working
capital to fund its effort to acquire a company by its March 2, 2023 deadline (absent an extension),
and the purposes for which it would use its available cash.  For example, in African Gold’s Form
10-Q for the second quarter of 2021 (the quarter ended June 30, 2021), the company reported that
it held approximately $1.3 million in cash, and that based on its reported cash balance and other
factors, “management believes that the Company will have sufficient working capital” to meet its
needs for one year or until African Gold acquired a target company.  This statement was materially

4
 As described above, the account held $544,103 for only one business day before Morgenthau
began draining the account on January 3, 2022.  The Form 10-K contained other
misrepresentations relating to the non-cash balance portion of the financial statements and other
matters.

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misleading because African Gold had only approximately $101,300 in cash left at that time, due
to Morgenthau’s ongoing theft, and that amount was almost certainly insufficient to fund African
Gold’s ongoing search for a company to acquire by its March 2023 deadline.  Moreover, African
Gold disclosed that it would use its cash “for paying existing accounts payable, identifying and
evaluating  prospective  [acquisition]  candidates,  performing  due  diligence  on  prospective  target
businesses, paying for travel expenditures, selecting the target business to merge with or acquire,
and  structuring,  negotiating  and  consummating  the  [acquisition].”    These  were  the  only
permissible uses of African Gold’s cash; funding Morgenthau’s personal expenses and securities
trading  was  not  among  them,  and  therefore  Morgenthau’s  actions  rendered  this  statement  to
investors materially misleading.
30. Morgenthau caused African Gold to make similar false and misleading statements
regarding the sufficiency of its working capital and the purposes for which it would use its cash
holdings in Forms 10-Q filed with the Commission for the third quarter of 2021 (the quarter ended
September 30, 2021) and the first quarter of 2022 (the quarter ended March 31, 2022).
31. In  a  series  of  announcements  in  late  August  and  September  2022,  African  Gold
reported that its financial statements contained in quarterly reports filed with the Commission for
the second and third quarters of 2021 (the quarters ended June 30 and September 30, 2021), its
annual report for 2021 (the fiscal year ended December 31, 2021), and its quarterly report for the
first quarter of 2022 (the quarter ended March 31, 2022) must be restated and should not be relied
upon.
5
  Because Morgenthau stole the majority of African Gold’s working capital, African Gold

5
 African Gold has not yet filed a quarterly report for the second or third quarters of 2022, and
has not yet issued any restated financial statements.

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had to borrow approximately $830,000 from its initial private investors in September 2022 in order
to fund its operations and continue its search for a company to acquire.
Morgenthau Misappropriated Funds from Strategic Metals’ Investors.

32. December 30, 2021, was not the first—or the last—time that Morgenthau lied to
investors  in  Strategic  Metals  to  solicit,  obtain,  and  misappropriate  their  investments.    Most
significantly,  he  misrepresented  to  numerous  investors  the  purpose  for  which  their  investments
would be used.  Ultimately Morgenthau used all of the money he raised from Strategic Metals’
investors—approximately $4.7 million—to pay personal expenses, fund securities trading (first in
meme stocks and later in crypto asset securities) in his personal accounts, and cover up his theft
from African Gold.
33. Beginning in July 2021, Morgenthau solicited investors in Strategic Metals, which
Morgenthau claimed would likely make initial public offering of securities by late 2021.  Strategic
Metals never conducted initial public offerings of securities.
34. Investors  in  Strategic  Metals  purchased  founder  shares  and  private  placement
warrants in accordance with their investment contracts.   Morgenthau represented to investors that
Strategic Metals would use their investment as working capital to pay relevant business expenses
in connection with, among other things, the initial public offerings of securities and the search for
companies  to  acquire.    For  example,  in  a  November  18,  2021  email,  Morgenthau  sent  three
prospective  investors  various  documents  including  a  draft  securities  registration  statement  for
Strategic  Metals  that  set  forth  each  category  of  expenses  for  which  the  money  raised  from  the
private  placement  would  be  used,  including  those  categories of expenses referenced above, and
stated:  “We do not anticipate any change in our intended use of proceeds . . . .”  Morgenthau knew
these representations were false because he intended at the time he raised the money to use it to
fund  personal  securities  trading  and  to  cover  up  his  theft  from  African  Gold.    None  of  these

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purposes  were  identified  in  any  documentation  he  sent  to  investors.    Two  of  the  recipients  of
Morgenthau’s email invested a total of $150,000 in Strategic Metals in exchange for founder shares
and private placement warrants.  The investors transferred the $150,000 to Strategic Metals’ bank
account.    Morgenthau  transferred  the  money  to  one  of  his  personal  bank  accounts  almost
immediately after it was received.
35. Indeed,  Morgenthau  generally  withdrew  any  money  from  the  Strategic  Metals’
bank account as soon as investors deposited it, and he used that money to cover up his theft from
African  Gold  and  to  fund  his  personal  trading  and  personal  expenses.    Morgenthau  withdrew
money  from  the  Strategic  Metals’  bank  account  on  the  very  same  day  that  it  was  deposited  by
investors on approximately 10 different occasions, totaling more than $1.1 million, and separately
instructed certain investors to wire money directly to his personal bank and brokerage accounts.
When one investor specifically asked Morgenthau whether the investor should be “surprised” that
he was wiring money to one of Morgenthau’s personal accounts, Morgenthau falsely assured the
investor  that  the  account  in  Morgenthau’s  name  “is  dedicated  to  Strategic  Metals  –  there  is  no
personal activity in this . . . account.”   To the contrary, Morgenthau used this account and his other
personal accounts for numerous types of activities unrelated to Strategic Metals.
36. In total, Morgenthau raised approximately $4.7 million from more than 50 investors
in Strategic Metals between July 2021 and July 2022.  Morgenthau misappropriated the entire $4.7
million, using it to fund personal trading, personal expenses, and temporarily cover up his theft of
money from African Gold.  Because of Morgenthau’s theft, there was no money in any Strategic
Metals’ bank account by the end of July 2022.

17
37. By  August  2022,  Morgenthau  used  about  $647,000  of  the  money  he  stole  from
Strategic Metals to pay certain African Gold business expenses.  Morgenthau either spent or lost
through speculative trading all of the remaining stolen funds.
6

CLAIMS FOR RELIEF

FIRST CLAIM FOR RELIEF
FRAUD IN THE OFFER OR SALE OF SECURITIES
(Violations of Sections 17(a) of the Securities Act)

38. Paragraphs 1 through 37 above are re-alleged and incorporated by reference as if
fully set forth herein.
39. During  the  Relevant  Period,  the  founder  shares  and  private  placement  warrants
issued by Strategic Metals Acquisition Corp. I and Strategic Metals Acquisition Corp. II each were
securities under Section 2(a)(1) of the Securities Act [15 U.S.C. §77b(a)(1)].
40. By  reason  of  the  conduct  described  above,  defendant  Morgenthau,  in  connection
with  the  offer  or  sale  of  securities,  by  the  use  of  the  means  or  instrumentalities  of  interstate
commerce  or  of  the  mails,  directly  or  indirectly,  acting  intentionally,  knowingly,  recklessly  or
negligently (i) employed devices, schemes, or artifices to defraud; (ii) obtained money or property
by means of untrue statements of material facts or omissions to state material facts necessary in
order to make the statements made, in light of the circumstances under which they were made, not
misleading; and (iii) engaged in transactions, practices, or courses of business which operated or
would  operate  as  a  fraud  or  deceit  upon  any  persons,  including  purchasers  or  sellers  of  the
securities.

6
 In addition to losing misappropriated funds through securities trading, Morgenthau lost a
substantial amount of money that he did not misappropriate from African Gold or from investors
in Strategic Metals.

18
41. As a result, defendant Morgenthau violated Securities Act Sections 17(a)(1), (2),
and (3) [15 U.S.C. §77q(a)(1), (2), and (3)].
SECOND CLAIM FOR RELIEF
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES
(Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder)

42. Paragraphs 1 through 37 above are re-alleged and incorporated by reference as if
fully set forth herein.
43. During  the  Relevant  Period,  the  stock  of  African  Gold  Acquisition  Corp.  and
founder shares and private placement warrants issued by Strategic Metals Acquisition Corp. I and
Strategic Metals Acquisition Corp. II each were securities under Section 3(a)(10) of the Exchange
Act [15 U.S.C. §78c(a)(10)].
44. By  reason  of  the  conduct  described  above,  defendant  Morgenthau,  directly  or
indirectly,  in  connection  with  the  purchase  or  sale  of  securities,  by  the  use  of  the  means  or
instrumentalities of interstate commerce or of the mails, or of any facility of any national securities
exchange,  intentionally,  knowingly  or  recklessly,  (i)  employed  devices,  schemes,  or  artifices  to
defraud; (ii) made untrue statements of material facts or omitted to state material facts necessary
in  order  to  make  the  statements  made,  in  the  light  of  the  circumstances  under  which  they  were
made, not misleading, and (iii) engaged in acts, practices, or courses of business which operated
or  would  operate  as  a  fraud  or  deceit  upon  any  persons,  including  purchasers  or  sellers  of  the
securities.
45. As a result, defendant Morgenthau violated Exchange Act Section 10(b) [15 U.S.C.
§78j(b)] and Rules 10b-5(a), (b), and (c) [17 C.F.R. §240.10b-5(a), (b), and (c)] thereunder.

19
THIRD CLAIM FOR RELIEF
FALSIFICATION OF BOOKS AND RECORDS
(Violations of Section 13(b)(5) and Rule 13b2-1 of the Exchange Act)

46. Paragraphs 1 through 37 above are re-alleged and incorporated by reference as if
fully set forth herein.
47. By  reason  of  the  conduct  described  above,  defendant  Morgenthau  knowingly
circumvented and/or knowingly failed to implement a system of internal accounting controls, and
directly or indirectly falsified and caused to be falsified African Gold Acquisition Corp.’s books,
records and accounts as those terms are used in Section 13(b)(2) of the Exchange Act [15 U.S.C.
§ 78m(b)(2)].
48. As a result, defendant Morgenthau violated Section 13(b)(5) of the Exchange Act
[15 U.S.C. § 78m(b)(5)] and Rule 13b2-1 [17 CFR § 240.13b2-1] thereunder.
FOURTH CLAIM FOR RELIEF
FALSE STATEMENTS TO ACCOUNTANTS AND AUDITOR
(Violations of Rules 13b2-2(a) and (b) of the Exchange Act)

49.   Paragraphs 1 through 37 above are re-alleged and incorporated by reference as if
fully set forth herein.
50. By reason of the conduct described above, defendant Morgenthau, while acting as
an officer or director of an issuer:
a. directly  and  indirectly,  made  and  caused  to  be  made,  materially  false  and
misleading statements, and omitted to state, and caused others to omit to state,
material  facts  necessary  in  order  to  make  statements  made,  in  light  of  the
circumstances under which they were made, not misleading, to an accountant
in   connection   with   audits   and   reviews   of   financial   statements   and   the

20
preparation  and  filing  of  documents  and  reports  required  to  be  filed  with  the
Commission; and
b. directly  and  indirectly  took  actions  to  manipulate,  mislead,  and  fraudulently
influence an independent public or certified public accountant engaged in the
performance of an audit or review of the financial statements of an issuer that
are  required  to  be  filed  with  the  Commission,  knowing  that  such  action,  if
successful, could result in rendering the issuer’s financial statements materially
misleading.
51. As a result, defendant Morgenthau violated Exchange Act Rule 13b2-2(a) and (b)
[17 CFR § 240.13b2-2(a) and (b)].
FIFTH CLAIM FOR RELIEF
FALSE CERTIFICATION OF PERIODIC FILINGS
(Violations of Rule 13a-14 of the Exchange Act)

52. Paragraphs 1 through 37 above are re-alleged and incorporated by reference as if
fully set forth herein.
53. By  reason  of  the  conduct  described  above,  defendant  Morgenthau  signed  the
certifications  in  African  Gold  Acquisition  Corp.’s  periodic  filings  identified  above  and  falsely
certified that, among other things:  (a) each periodic public filing contained no untrue statement of
a material fact and did not omit to state a material fact necessary to make the statements made, in
light  of  the  circumstances  under  which  such  statements  were  made,  not  misleading;  (b)  the
financial statements and other financial information included in the periodic public filings fairly
presented, in all material respects, the financial condition of the company and its cash flows; and
(c)  Morgenthau  disclosed  to  the  company’s  auditor  and  the  audit  committee  of  the  company’s

21
board of directors any fraud that involved management or other employees who had a significant
role in the company’s internal control over financial reporting.
54. As  a  result,  defendant  Morgenthau  violated  Exchange  Act  Rule  13a-14  [17  CFR
§ 240.
13a-14].
PRAYER FOR RELIEF
WHEREFORE, the Commission requests that this Court:
A. Permanently restrain defendant Morgenthau, his officers, agents, servants,
employees and attorneys, and those persons in active concert or participation with him who
receive actual notice of the injunction by personal service or otherwise, from violating Section
17(a) of the Securities Act [15 U.S.C. §§ 77q(a)], Sections 10(b) and 13(b)(5) of the Exchange
Act [15 U.S.C. §§ 78j(b), 78m(b)(5)], and Rules 10b-5, 13b2-1, 13b2-2(a) and (b), and 13a-14
thereunder [17 C.F.R. §§ 240.10b-5, 240.13b2-1, 240.13b2-2(a) and (b), and 240.
13a-14].
B. Order defendant Morgenthau to disgorge, with prejudgment interest, all ill-gotten
gains obtained by reason of the unlawful conduct alleged in this Complaint;
C. Order defendant Morgenthau to pay civil monetary penalties pursuant to Section
20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15
U.S.C. § 78u(d)(3)];
D. Enter an order barring defendant Morgenthau from acting as an officer or director
of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act
[15 U.S.C. § 781], or that is required to file reports pursuant to Section 15(d) of the Exchange
Act [15 U.SC. § 78o(d)];
E. Retain jurisdiction over this action to implement and carry out the terms of all
orders and decrees that may be entered; and

22
F. Grant such other and further relief as this Court may deem just and proper.
JURY DEMAND
The Commission demands a jury in this matter for all claims so triable.
                                                                        Respectfully            submitted,
      SECURITIES AND EXCHANGE
      COMMISSION

      By its attorneys,

      /s/ David J. D’Addio
                                                                        David            J.            D’Addio
                                                                        Anne            Hancock*
                                                                        Boston            Regional            Office
                                                                        33            Arch            Street,            24th            Floor
Boston, MA  02110
(617) 573-4526
(617) 573-4590 (Facsimile)
[email protected]
[email protected]
Dated:  January 3, 2023

*Not admitted in the U.S. District Court for the Southern District of New York

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

 
________________________________________________ 
        : 
SECURITIES AND EXCHANGE COMMISSION, : 
        : 
     Plaintiff,   : 
        : 

v. : No. 23 Civ. 00022 
:  

COOPER J. MORGENTHAU,    : JURY TRIAL  
        : DEMANDED  
     Defendant.  : 
________________________________________________: 
 

COMPLAINT 
 

 Plaintiff Securities and Exchange Commission (the “Commission”), for its Complaint 

against defendant Cooper J. Morgenthau (“Morgenthau”), alleges as follows: 

PRELIMINARY STATEMENT 
 

1. From at least June 2021 through at least July 2022 (the “Relevant Period”), 

defendant Morgenthau stole more than $5 million from his employer, a publicly-traded special 

purpose acquisition company (“SPAC”), and from investors in two companies that Morgenthau 

incorporated for the purpose of becoming SPACs.  Morgenthau used the stolen funds to cover his 

personal expenses and his trading in so-called meme stocks and crypto asset securities.   

2. Morgenthau was the Chief Financial Officer of African Gold Acquisition Corp. 

(“African Gold”), a SPAC seeking to acquire a company in the gold mining industry.  During the 

Relevant Period, Morgenthau wired more than $1.2 million of African Gold’s money to his 

personal bank and brokerage accounts.  He used the money primarily to trade options on meme 

stocks, i.e., stocks that gained large online and social media followings among retail investors.     

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3. To avoid detection, Morgenthau doctored African Gold’s monthly bank statements 

by, for example, deleting his unauthorized transactions and overstating the available account 

balance in any given month by as much as $1.19 million.  Morgenthau then emailed these 

fabricated bank statements to African Gold’s accountants and auditor, along with letters falsely 

attesting that he was unaware of any fraud at African Gold and that the company had properly 

recorded in the company’s books and records all material transactions.  Morgenthau knew that 

African Gold’s accountants and auditor would rely on his falsified bank statements and his false 

assurances in those letters to prepare financial statements that were incorporated into African 

Gold’s quarterly and annual reports filed with the Commission.  Because of Morgenthau’s 

fraudulent scheme, those publicly filed reports contained materially false and misleading 

statements regarding African Gold’s financial condition and other matters.  Morgenthau signed 

those reports and attested to their accuracy in certifications filed with the Commission, while 

knowing that the reports contained materially false and misleading information because of his own 

fraud.  

4. Morgenthau either spent or lost through securities trading all of the money he stole 

from African Gold.  To cover his losses, Morgenthau raised money by soliciting investors to help 

launch another series of SPACs:  Strategic Metals Acquisition Corp. I and Strategic Metals 

Acquisition Corp. II (together, “Strategic Metals”).  From at least July 2021 through at least July 

2022, Morgenthau raised approximately $4.7 million from investors in Strategic Metals, all of 

which he misappropriated for himself.   

5. Morgenthau deposited some of the money he raised for Strategic Metals into 

African Gold’s bank account in order to conceal his embezzlement from African Gold and its 

accountants and auditor.  For example, Morgenthau deposited more than half a million dollars of 

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 3

Strategic Metals’ funds into African Gold’s bank account on December 31, 2021, because he knew 

that African Gold’s auditor would confirm the account balance as of that date, in connection with 

African Gold’s year-end audit. Almost immediately thereafter, Morgenthau began withdrawing 

the money from African Gold’s bank account and used most of it to trade crypto asset securities.  

Morgenthau periodically deposited just enough money in African Gold’s bank account to cover 

certain essential business expenses, such as fees for the company’s lawyers, accountants, and 

auditor, so that his theft would remain undetected.   

6. But by August 2022, Morgenthau had run out of money.  The bank accounts for 

African Gold and Strategic Metals were empty.  African Gold vendors refused to perform work 

for the company, and Morgenthau’s scheme was exposed.  African Gold fired Morgenthau on 

August 26, 2022.         

7. By knowingly or recklessly engaging in the conduct described in this Complaint, 

Morgenthau violated, and unless restrained and enjoined will continue to violate, Section 17(a) of 

the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77q(a)], Sections 10(b) and 13(b)(5) 

of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78j(b), 78m(b)(5)] and 

Rules 10b-5, 13b2-1, 13b2-2(a) and (b), and 13a-14 thereunder [17 C.F.R. §§ 240.10b-5, 

240.13b2-1, 240.13b2-2(a) and (b),  and 240.13a-14]. 

NATURE OF PROCEEDING AND RELIEF SOUGHT 

8. The Commission seeks a permanent injunction against the Defendant, enjoining 

him from engaging in the transactions, acts, practices, and courses of business of the type alleged 

in this Complaint; disgorgement of all ill-gotten gains from the unlawful conduct set forth in this 

Complaint, together with prejudgment interest; civil penalties pursuant Section 20(d) of the 

Securities Act [15 U.S.C. §77t(d)] and/or Section 21(d)(3) of the Exchange Act [15 U.S.C. 

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 4

§78u(d)(3)]; an order prohibiting the Defendant from acting as an officer or director of any issuer 

that has a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. 

§ 781], or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.SC. 

§ 78o(d)] and such other relief as the Court may deem just and appropriate. 

JURISDICTION AND VENUE 

9. This Court has jurisdiction over this action pursuant to Section 22(a) of the 

Securities Act [15 U.S.C. § 77v(a)] and Sections 21(d), 21(e), and 27 of the Exchange Act [15 

U.S.C. §§ 78u(d), 78u(e), and 78aa].  The Defendant has directly or indirectly made use of the 

means or instrumentalities of interstate commerce, or of the mails, or the facilities of a national 

securities exchange in connection with the acts, practices, transactions, and courses of business 

alleged in this Complaint. 

10. Venue in this District is proper under Section 22(a) of the Securities Act [15 U.S.C. 

§ 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa] because during the Relevant 

Period, the Defendant lived in this District; African Gold’s principal place of business was in this 

District; Strategic Metals’ principal place of business was in this District; and the Defendant’s 

conduct constituting the violations alleged in this Complaint occurred largely in this District.     

DEFENDANT 

11. Cooper J. Morgenthau, 35, is a resident of New York, New York.  Morgenthau 

served as African Gold’s CFO from October 2020 until August 26, 2022, when he was fired.  

Morgenthau is the CFO of Strategic Metals Acquisition Corp. I and Strategic Metals Acquisition 

Corp II.      

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 5

RELEVANT ENTITIES 

12.   African Gold Acquisition Corp. is a publicly traded SPAC incorporated in the 

Cayman Islands with its principal place of business in New York, New York.  African Gold’s 

securities are registered with the Commission pursuant to Section 12(b) of the Exchange Act.  

African Gold is listed on the New York Stock Exchange under the symbols AGAC.U, AGAC, and 

AGAC.W.  African Gold is searching for a company to acquire.  According to the terms of its 

prospectus, African Gold has until March 2, 2023, to acquire a company, absent an extension.  

13. Strategic Metals Acquisition Corp. I (“Strategic Metals I”) is a company 

incorporated in the Cayman Islands for the purpose of becoming a publicly traded SPAC.  

Morgenthau is the CFO of Strategic Metals I.  Strategic Metals I never completed its initial public 

offering of securities.   

14. Strategic Metals Acquisition Corp. II (“Strategic Metals II”) is also a company 

incorporated in the Cayman Islands for the purpose of becoming a publicly traded SPAC.  

Morgenthau is the CFO of Strategic Metals II.  Strategic Metals II never completed its initial public 

offering of securities.   

FACTUAL ALLEGATIONS 

15. Cooper Morgenthau was African Gold’s Chief Financial Officer from the 

company’s incorporation in October 2020, until he was fired in August 2022.  As a SPAC, African 

Gold has no operations, other than searching for a company to acquire.  During the Relevant Period, 

African Gold’s only employees were its Chief Financial Officer (Morgenthau), Chief Executive 

Officer, and Chief Operating Officer.  As a publicly traded company, African Gold is managed by 

a board of directors.  

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 6

16.  African Gold’s stock began trading publicly on the New York Stock Exchange on 

February 26, 2021.  Its initial public offering of securities raised approximately $414 million from 

investors, all of which was placed in a trust account to which Morgenthau did not have access.  

But Morgenthau did have access to African Gold’s operating bank account, which immediately 

after the initial public offering of securities, held approximately $1.5 million.  This money was 

intended to fund African Gold’s efforts to identify and acquire a company in the gold mining 

industry.  As African Gold’s CFO, Morgenthau had authority to make deposits into and 

withdrawals from this bank account to further African Gold’s efforts to acquire such a company.       

Morgenthau Embezzled African Gold’s Funds. 

17. On June 4, 2021, Morgenthau transferred $36,700 from the African Gold operating 

bank account to one of his personal brokerage accounts to fund trading in meme stocks.  Similarly, 

on June 15, 2021, Morgenthau transferred $25,000 from the African Gold operating bank account 

to his own checking account for personal expenses wholly unrelated to African Gold.  These were 

the first in a series of 34 withdrawals that Morgenthau made during June and July 2021, each below 

a $50,000 threshold that would have triggered secondary review and approval by an African Gold 

board member.  In all, Morgenthau transferred more than $1.2 million during this time to his 

personal bank and brokerage accounts, leaving African Gold with just $100 in its operating bank 

account by July 29, 2021.    

18. To hide this theft from African Gold and from the company’s external accountants 

and auditor, Morgenthau falsified the company’s monthly operating bank account statements, 

deleting all references to his unauthorized withdrawals and falsifying the month-end balances and 

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 7

other transactional information.1  For example, Morgenthau erased $1,150,200 in unauthorized 

transfers into his checking and brokerage accounts from African Gold’s June 30, 2021 operating 

bank account statement.  Portions of African Gold’s actual June 2021 operating bank account 

statement and Morgenthau’s falsified statement are below.  Falsified information is highlighted:  

Actual June 30, 2021 Bank Statement 

 

Falsified June 30, 2021 Bank Statement 

 
    

                                                 
1 As a SPAC with limited operations and few employees, African Gold did not have an internal 
finance department and instead outsourced the majority of its financial reporting functions to 
external accountants during the Relevant Period.  Similarly, African Gold did not have an 
internal audit department and hired an external auditor to conduct all reviews and audits of its 
financial statements.   

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 8

Morgenthau Lied to African Gold’s Accountants and Auditor. 

19. Morgenthau emailed the falsified monthly operating bank account statements to 

African Gold’s accountants each quarter.  He did so knowing that the accountants would rely on 

these falsified statements to generate and maintain African Gold’s books and records, and compile 

the financial statements that the company incorporated into its quarterly and annual reports filed 

with the Commission and made available to the investing public.  As a result, African Gold’s books 

and records contained material errors and omissions, as did the company’s financial statements 

derived from those books and records.   

20. Morgenthau also emailed these falsified operating bank account statements to 

African Gold’s auditor, knowing that the auditor would rely on them to conduct quarterly reviews 

of African Gold’s financial statements and an annual audit of those financial statements.  In 

connection with those quarterly reviews and the annual audit, Morgenthau provided several letters 

to African Gold’s auditor falsely attesting that all material transactions “have been properly 

recorded in the accounting records underlying the . . . financial statements.”  He further claimed 

he had “no knowledge of any fraud or suspected fraud affecting the Company involving:  

a. management; b. employees who have significant roles in internal control; or c. others where the 

fraud could have a material effect on the . . . financial statements.”  Morgenthau made these 

misrepresentations to the auditor in a series of letters dated August 16, 2021; November 22, 2021; 

April 15, 2022; and May 16, 2022.  Every time he made these statements, Morgenthau knew they 

were false and misleading, and he knew that the auditor would rely on them in reviewing and 

auditing African Gold’s periodic financial statements.   

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 9

Morgenthau Made False Filings with the Commission. 

21.  As a publicly traded company whose securities were registered with the 

Commission, African Gold was required to file periodic reports with the Commission, including 

annual (Forms 10-K) and quarterly (Forms 10-Q) reports.  African Gold was required, among other 

things, to include financial statements in its quarterly and annual reports that accurately and fairly 

reflected its financial condition.  Once filed, African Gold’s periodic reports and accompanying 

financial statements became available to the investing public. 

22. As African Gold’s CFO, Morgenthau was responsible for reviewing and approving 

the company’s financial statements and its quarterly and annual reports.  Morgenthau signed each 

of African Gold’s quarterly and annual reports before they were filed with the Commission.  He 

also signed certifications under the Sarbanes-Oxley Act of 2002, attesting that, among other things:  

(a) each report did not include any material misstatements or omissions; (b) each report fairly 

presented, in all material respects, African Gold’s financial condition for that period; and 

(c) Morgenthau disclosed to African Gold’s auditor and the audit committee of African Gold’s 

board of directors any fraud involving management with a significant role in African Gold’s 

internal control over financial reporting.  Despite those certifications, Morgenthau knew that 

African Gold’s periodic reports materially misstated the company’s financial condition, beginning 

in the second quarter of fiscal year 2021 (the quarter ended June 30, 2021) and continuing through 

the first quarter of 2022 (the quarter ended March 31, 2022) and that those material misstatements 

were the result of Morgenthau’s own fraud, which he reported to no one.  Moreover, Morgenthau 

knew that the quarterly and annual reports contained other false statements about African Gold’s 

internal controls, use of working capital, and other matters.   

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 10

23. Regarding the company’s financial condition, for example, African Gold reported 

in its Form 10-Q for the second quarter of 2021 (the quarter ended June 30, 2021) that it held $1.3 

million in cash that it could use to search for a company to acquire.  Because of Morgenthau’s 

theft, however, African Gold held only $101,303, and thus overstated its cash holdings in its Form 

10-Q by more than 1,100 percent.  Similarly, in its Form 10-Q for the third quarter of 2021 (the 

quarter ended September 30, 2021), African Gold reported $932,771 in cash.  But in reality, 

African Gold held only $104,371 in cash because of Morgenthau’s theft, and thus overstated its 

cash holdings in its Form 10-Q by more than 793 percent.2     

24. During this time, Morgenthau used the money he stole from African Gold primarily 

to trade options contracts for meme stocks in his personal accounts.  His trading strategy was not 

successful; he quickly lost all of the stolen funds that he invested.      

25. Near the end of the fourth quarter of 2021 (quarter ended December 31, 2021), 

African Gold’s bank account should have held $544,103 according to Morgenthau’s falsified 

operating bank account statements, but in reality the bank account instead held a negative balance 

of $5,042 because of Morgenthau’s theft.  Morgenthau knew that African Gold’s auditor would 

confirm directly with the bank the actual account balance as of December 31, 2021, as a part of its 

year-end audit.  Morgenthau also knew that if the auditor discovered that the account was missing 

more than half a million dollars, his scheme would unravel.  So on December 30, 2021, 

Morgenthau emailed at least seven investors in Strategic Metals, telling them that he “urgently” 

needed additional funding by the next business day in order for the underwriters to start marketing 

                                                 
2 As noted, Morgenthau had drained all but $100 of African Gold’s cash by July 29, 2021.  
Thereafter he periodically deposited funds that he had fraudulently raised from Strategic Metals’ 
investors into the African Gold bank account in order to cover certain essential business 
expenses, including payments to African Gold’s lawyers, accountants, and other service 
providers, and thereby prevent discovery of his theft.   

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 11

the SPACs prior to their initial public offerings of securities.  He offered these investors additional 

founder shares and private placement warrants issued by Strategic Metals if they immediately 

increased their investments in the SPACs.3  Morgenthau’s statements to investors in Strategic 

Metals about the purpose of these funds were false and misleading.  Morgenthau “urgently” needed 

the investors’ money not to start marketing Strategic Metals, but to temporarily cover up his theft 

from African Gold and deceive its auditor in connection with its year-end audit.  Through these 

false statements, Morgenthau raised approximately $625,000 from Strategic Metals’ investors on 

December 30 and December 31, 2021.   At Morgenthau’s direction, investors sent the funds to one 

of Strategic Metals’ bank accounts.  Morgenthau immediately transferred the entire $625,000 from 

that Strategic Metals account to various personal accounts, and then transferred $549,145.73 from 

his personal checking account to African Gold’s operating bank account.  As a result, African 

Gold’s year-end account balance was $544,103.39—the exact amount needed to match the year-

end balance according to Morgenthau’s falsified bank statements.  Portions of African Gold’s 

actual December 2021 operating bank account statement and Morgenthau’s falsified statement are 

below.  Falsified information is highlighted: 

Actual December 31, 2021 Bank Statement 

 

                                                 
3 Founder shares refer to Class B shares initially purchased in private placement offerings; they 
convert to Class A shares (i.e., those issued to the public in an initial offering) if and when the 
SPAC completes its acquisition of a company.   

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Falsified December 31, 2021 Bank Statement 

 
 

26. The $544,103.39 did not stay in African Gold’s operating bank account very long.  

On January 3, 2022—the first business day of the new year—Morgenthau began withdrawing the 

money he had deposited just days before, transferring approximately $401,000 on that day alone 

from the African Gold operating bank account to his personal bank accounts.  He continued to 

withdraw funds from the African Gold operating bank account over the next few days, sending the 

money to himself to fund his trading in crypto asset securities.  By the end of the month, the African 

Gold operating bank account held only $13.    

27. Throughout much of 2022, Morgenthau occasionally deposited funds into the 

African Gold operating bank account.  All of those funds, however, came from Morgenthau’s 

ongoing Strategic Metals fraud scheme.  While Morgenthau was stealing money from African 

Gold, he was simultaneously and fraudulently raising millions of dollars from more than 50 

investors to launch the Strategic Metals SPACs.  This fraud scheme is described in greater detail 

below.  Morgenthau used most of the money he raised for Strategic Metals to fund his trading in 

crypto asset securities and pay for personal expenses.  But he also funneled some of Strategic 

Metals’ money into African Gold’s operating bank account in order to pay certain essential African 

Gold business expenses—money owed to African Gold’s accountants, lawyers, and auditor, for 

example—and thereby hide or delay the discovery of his theft.  Despite these occasional deposits, 

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the African Gold operating bank account ran a negative average balance every month from March 

2022 through Morgenthau’s termination in August 2022.   Throughout this time, Morgenthau 

continued to falsify bank statements that he provided to African Gold’s accountants and auditor in 

order to hide his theft.    

28. As a result, Morgenthau caused African Gold to materially misrepresent its 

financial condition to investors throughout much of 2021 and well into 2022.  Misstatements in 

African Gold’s financial statements relating to its reported cash balance are summarized in the 

table below.   

 Q2 FY 2021 Q3 FY 2021 Q4 FY 2021 Q1 FY 2022 

Reported Cash $1,251,503 $932,771 $544,103 $432,819 

Actual Cash $101,303 $104,371 $544,1034 $(1,761) 

Overstatement $1,150,200 $828,400 $ - $434,580 
Overstatement as % of 
Actual Cash (Absolute 
Value) 1135.4% 793.7% 0.0% 24671.2% 

29. Morgenthau also caused African Gold to misrepresent the sufficiency of its working 

capital to fund its effort to acquire a company by its March 2, 2023 deadline (absent an extension), 

and the purposes for which it would use its available cash.  For example, in African Gold’s Form 

10-Q for the second quarter of 2021 (the quarter ended June 30, 2021), the company reported that 

it held approximately $1.3 million in cash, and that based on its reported cash balance and other 

factors, “management believes that the Company will have sufficient working capital” to meet its 

needs for one year or until African Gold acquired a target company.  This statement was materially 

                                                 
4 As described above, the account held $544,103 for only one business day before Morgenthau 
began draining the account on January 3, 2022.  The Form 10-K contained other 
misrepresentations relating to the non-cash balance portion of the financial statements and other 
matters.    

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misleading because African Gold had only approximately $101,300 in cash left at that time, due 

to Morgenthau’s ongoing theft, and that amount was almost certainly insufficient to fund African 

Gold’s ongoing search for a company to acquire by its March 2023 deadline.  Moreover, African 

Gold disclosed that it would use its cash “for paying existing accounts payable, identifying and 

evaluating prospective [acquisition] candidates, performing due diligence on prospective target 

businesses, paying for travel expenditures, selecting the target business to merge with or acquire, 

and structuring, negotiating and consummating the [acquisition].”  These were the only 

permissible uses of African Gold’s cash; funding Morgenthau’s personal expenses and securities 

trading was not among them, and therefore Morgenthau’s actions rendered this statement to 

investors materially misleading.  

30. Morgenthau caused African Gold to make similar false and misleading statements 

regarding the sufficiency of its working capital and the purposes for which it would use its cash 

holdings in Forms 10-Q filed with the Commission for the third quarter of 2021 (the quarter ended 

September 30, 2021) and the first quarter of 2022 (the quarter ended March 31, 2022).   

31. In a series of announcements in late August and September 2022, African Gold 

reported that its financial statements contained in quarterly reports filed with the Commission for 

the second and third quarters of 2021 (the quarters ended June 30 and September 30, 2021), its 

annual report for 2021 (the fiscal year ended December 31, 2021), and its quarterly report for the 

first quarter of 2022 (the quarter ended March 31, 2022) must be restated and should not be relied 

upon.5  Because Morgenthau stole the majority of African Gold’s working capital, African Gold 

                                                 
5 African Gold has not yet filed a quarterly report for the second or third quarters of 2022, and 
has not yet issued any restated financial statements.   

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had to borrow approximately $830,000 from its initial private investors in September 2022 in order 

to fund its operations and continue its search for a company to acquire.   

Morgenthau Misappropriated Funds from Strategic Metals’ Investors. 
 
32. December 30, 2021, was not the first—or the last—time that Morgenthau lied to 

investors in Strategic Metals to solicit, obtain, and misappropriate their investments.  Most 

significantly, he misrepresented to numerous investors the purpose for which their investments 

would be used.  Ultimately Morgenthau used all of the money he raised from Strategic Metals’ 

investors—approximately $4.7 million—to pay personal expenses, fund securities trading (first in 

meme stocks and later in crypto asset securities) in his personal accounts, and cover up his theft 

from African Gold.        

33. Beginning in July 2021, Morgenthau solicited investors in Strategic Metals, which 

Morgenthau claimed would likely make initial public offering of securities by late 2021.  Strategic 

Metals never conducted initial public offerings of securities.   

34. Investors in Strategic Metals purchased founder shares and private placement 

warrants in accordance with their investment contracts.   Morgenthau represented to investors that 

Strategic Metals would use their investment as working capital to pay relevant business expenses 

in connection with, among other things, the initial public offerings of securities and the search for 

companies to acquire.  For example, in a November 18, 2021 email, Morgenthau sent three 

prospective investors various documents including a draft securities registration statement for 

Strategic Metals that set forth each category of expenses for which the money raised from the 

private placement would be used, including those categories of expenses referenced above, and 

stated:  “We do not anticipate any change in our intended use of proceeds . . . .”  Morgenthau knew 

these representations were false because he intended at the time he raised the money to use it to 

fund personal securities trading and to cover up his theft from African Gold.  None of these 

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purposes were identified in any documentation he sent to investors.  Two of the recipients of 

Morgenthau’s email invested a total of $150,000 in Strategic Metals in exchange for founder shares 

and private placement warrants.  The investors transferred the $150,000 to Strategic Metals’ bank 

account.  Morgenthau transferred the money to one of his personal bank accounts almost 

immediately after it was received.   

35. Indeed, Morgenthau generally withdrew any money from the Strategic Metals’ 

bank account as soon as investors deposited it, and he used that money to cover up his theft from 

African Gold and to fund his personal trading and personal expenses.  Morgenthau withdrew 

money from the Strategic Metals’ bank account on the very same day that it was deposited by 

investors on approximately 10 different occasions, totaling more than $1.1 million, and separately 

instructed certain investors to wire money directly to his personal bank and brokerage accounts.  

When one investor specifically asked Morgenthau whether the investor should be “surprised” that 

he was wiring money to one of Morgenthau’s personal accounts, Morgenthau falsely assured the 

investor that the account in Morgenthau’s name “is dedicated to Strategic Metals – there is no 

personal activity in this . . . account.”   To the contrary, Morgenthau used this account and his other 

personal accounts for numerous types of activities unrelated to Strategic Metals.  

36. In total, Morgenthau raised approximately $4.7 million from more than 50 investors 

in Strategic Metals between July 2021 and July 2022.  Morgenthau misappropriated the entire $4.7 

million, using it to fund personal trading, personal expenses, and temporarily cover up his theft of 

money from African Gold.  Because of Morgenthau’s theft, there was no money in any Strategic 

Metals’ bank account by the end of July 2022.    

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37. By August 2022, Morgenthau used about $647,000 of the money he stole from 

Strategic Metals to pay certain African Gold business expenses.  Morgenthau either spent or lost 

through speculative trading all of the remaining stolen funds.6       

CLAIMS FOR RELIEF 
 

FIRST CLAIM FOR RELIEF 
FRAUD IN THE OFFER OR SALE OF SECURITIES 

(Violations of Sections 17(a) of the Securities Act) 
 

38. Paragraphs 1 through 37 above are re-alleged and incorporated by reference as if 

fully set forth herein. 

39. During the Relevant Period, the founder shares and private placement warrants 

issued by Strategic Metals Acquisition Corp. I and Strategic Metals Acquisition Corp. II each were 

securities under Section 2(a)(1) of the Securities Act [15 U.S.C. §77b(a)(1)]. 

40. By reason of the conduct described above, defendant Morgenthau, in connection 

with the offer or sale of securities, by the use of the means or instrumentalities of interstate 

commerce or of the mails, directly or indirectly, acting intentionally, knowingly, recklessly or 

negligently (i) employed devices, schemes, or artifices to defraud; (ii) obtained money or property 

by means of untrue statements of material facts or omissions to state material facts necessary in 

order to make the statements made, in light of the circumstances under which they were made, not 

misleading; and (iii) engaged in transactions, practices, or courses of business which operated or 

would operate as a fraud or deceit upon any persons, including purchasers or sellers of the 

securities.   

                                                 
6 In addition to losing misappropriated funds through securities trading, Morgenthau lost a 
substantial amount of money that he did not misappropriate from African Gold or from investors 
in Strategic Metals.    

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41. As a result, defendant Morgenthau violated Securities Act Sections 17(a)(1), (2), 

and (3) [15 U.S.C. §77q(a)(1), (2), and (3)]. 

SECOND CLAIM FOR RELIEF 
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES 

(Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder) 
 

42. Paragraphs 1 through 37 above are re-alleged and incorporated by reference as if 

fully set forth herein. 

43. During the Relevant Period, the stock of African Gold Acquisition Corp. and 

founder shares and private placement warrants issued by Strategic Metals Acquisition Corp. I and 

Strategic Metals Acquisition Corp. II each were securities under Section 3(a)(10) of the Exchange 

Act [15 U.S.C. §78c(a)(10)].  

44. By reason of the conduct described above, defendant Morgenthau, directly or 

indirectly, in connection with the purchase or sale of securities, by the use of the means or 

instrumentalities of interstate commerce or of the mails, or of any facility of any national securities 

exchange, intentionally, knowingly or recklessly, (i) employed devices, schemes, or artifices to 

defraud; (ii) made untrue statements of material facts or omitted to state material facts necessary 

in order to make the statements made, in the light of the circumstances under which they were 

made, not misleading, and (iii) engaged in acts, practices, or courses of business which operated 

or would operate as a fraud or deceit upon any persons, including purchasers or sellers of the 

securities. 

45. As a result, defendant Morgenthau violated Exchange Act Section 10(b) [15 U.S.C. 

§78j(b)] and Rules 10b-5(a), (b), and (c) [17 C.F.R. §240.10b-5(a), (b), and (c)] thereunder. 

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THIRD CLAIM FOR RELIEF 
FALSIFICATION OF BOOKS AND RECORDS 

(Violations of Section 13(b)(5) and Rule 13b2-1 of the Exchange Act) 
 

46. Paragraphs 1 through 37 above are re-alleged and incorporated by reference as if 

fully set forth herein.   

47. By reason of the conduct described above, defendant Morgenthau knowingly 

circumvented and/or knowingly failed to implement a system of internal accounting controls, and 

directly or indirectly falsified and caused to be falsified African Gold Acquisition Corp.’s books, 

records and accounts as those terms are used in Section 13(b)(2) of the Exchange Act [15 U.S.C. 

§ 78m(b)(2)]. 

48. As a result, defendant Morgenthau violated Section 13(b)(5) of the Exchange Act 

[15 U.S.C. § 78m(b)(5)] and Rule 13b2-1 [17 CFR § 240.13b2-1] thereunder. 

FOURTH CLAIM FOR RELIEF 
FALSE STATEMENTS TO ACCOUNTANTS AND AUDITOR 

(Violations of Rules 13b2-2(a) and (b) of the Exchange Act) 
 

49.   Paragraphs 1 through 37 above are re-alleged and incorporated by reference as if 

fully set forth herein.  

50. By reason of the conduct described above, defendant Morgenthau, while acting as 

an officer or director of an issuer:  

a. directly and indirectly, made and caused to be made, materially false and 

misleading statements, and omitted to state, and caused others to omit to state, 

material facts necessary in order to make statements made, in light of the 

circumstances under which they were made, not misleading, to an accountant 

in connection with audits and reviews of financial statements and the 

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preparation and filing of documents and reports required to be filed with the 

Commission; and  

b. directly and indirectly took actions to manipulate, mislead, and fraudulently 

influence an independent public or certified public accountant engaged in the 

performance of an audit or review of the financial statements of an issuer that 

are required to be filed with the Commission, knowing that such action, if 

successful, could result in rendering the issuer’s financial statements materially 

misleading. 

51. As a result, defendant Morgenthau violated Exchange Act Rule 13b2-2(a) and (b) 

[17 CFR § 240.13b2-2(a) and (b)]. 

FIFTH CLAIM FOR RELIEF 
FALSE CERTIFICATION OF PERIODIC FILINGS 

(Violations of Rule 13a-14 of the Exchange Act) 
 

52. Paragraphs 1 through 37 above are re-alleged and incorporated by reference as if 

fully set forth herein.   

53. By reason of the conduct described above, defendant Morgenthau signed the 

certifications in African Gold Acquisition Corp.’s periodic filings identified above and falsely 

certified that, among other things:  (a) each periodic public filing contained no untrue statement of 

a material fact and did not omit to state a material fact necessary to make the statements made, in 

light of the circumstances under which such statements were made, not misleading; (b) the 

financial statements and other financial information included in the periodic public filings fairly 

presented, in all material respects, the financial condition of the company and its cash flows; and 

(c) Morgenthau disclosed to the company’s auditor and the audit committee of the company’s 

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board of directors any fraud that involved management or other employees who had a significant 

role in the company’s internal control over financial reporting.   

54. As a result, defendant Morgenthau violated Exchange Act Rule 13a-14 [17 CFR 

§ 240.13a-14]. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission requests that this Court: 

A. Permanently restrain defendant Morgenthau, his officers, agents, servants, 

employees and attorneys, and those persons in active concert or participation with him who 

receive actual notice of the injunction by personal service or otherwise, from violating Section 

17(a) of the Securities Act [15 U.S.C. §§ 77q(a)], Sections 10(b) and 13(b)(5) of the Exchange 

Act [15 U.S.C. §§ 78j(b), 78m(b)(5)], and Rules 10b-5, 13b2-1, 13b2-2(a) and (b), and 13a-14 

thereunder [17 C.F.R. §§ 240.10b-5, 240.13b2-1, 240.13b2-2(a) and (b), and 240.13a-14]. 

B. Order defendant Morgenthau to disgorge, with prejudgment interest, all ill-gotten 

gains obtained by reason of the unlawful conduct alleged in this Complaint; 

C. Order defendant Morgenthau to pay civil monetary penalties pursuant to Section 

20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 

U.S.C. § 78u(d)(3)];  

D. Enter an order barring defendant Morgenthau from acting as an officer or director 

of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act 

[15 U.S.C. § 781], or that is required to file reports pursuant to Section 15(d) of the Exchange 

Act [15 U.SC. § 78o(d)]; 

E. Retain jurisdiction over this action to implement and carry out the terms of all 

orders and decrees that may be entered; and  

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F. Grant such other and further relief as this Court may deem just and proper. 

JURY DEMAND 

The Commission demands a jury in this matter for all claims so triable. 

      Respectfully submitted, 

      SECURITIES AND EXCHANGE  
      COMMISSION 
 
      By its attorneys, 
 
 
      /s/ David J. D’Addio 
      David J. D’Addio 
      Anne Hancock* 
      Boston Regional Office 
      33 Arch Street, 24th Floor 

Boston, MA  02110 
(617) 573-4526 
(617) 573-4590 (Facsimile) 
[email protected] 
[email protected] 

Dated:  January 3, 2023 
 

 
*Not admitted in the U.S. District Court for the Southern District of New York  

 

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