In re AFRICAN GOLD

UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No.  96960 / February 22, 2023 
 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No.  4377 / February 22, 2023 
 
ADMINISTRATIVE PROCEEDING 
File No.  3-21309 
 
In the Matter of 
 
AFRICAN GOLD 
ACQUISITION CORP., 
 
Respondent. 
 
 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER  
  
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”), against African Gold Acquisition Corp. (“African Gold” 
or “Respondent”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-
and-Desist Proceedings pursuant to Section 21C of the Securities Exchange Act of 1934, Making 
Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below.   
 

 2 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that:  
 
Summary 
 
1. African Gold is a publicly traded special purpose acquisition company (“SPAC”).  
Since the closing of its initial public offering (“IPO”) of securities on March 2, 2021 until late 
2022, African Gold failed properly to devise and maintain a sufficient system of internal 
accounting controls and also failed to maintain internal control over financial reporting (“ICFR”) 
and disclosure controls and procedures (“DCP”) as required.  African Gold’s failure to implement 
sufficient internal controls enabled its former chief financial officer (“CFO”) to misappropriate 
nearly all of the money in African Gold’s operating bank account and to otherwise effectively use 
African Gold’s operating bank account as his own personal account for over one year.
2
  As a result, 
African Gold materially misstated the financial information in several required financial filings 
with the Commission.  African Gold’s former CFO did not have access to African Gold’s trust 
account and did not misappropriate any funds from the trust account. 
 
 2. According to disclosures in its public filings, African Gold’s activities are limited to 
searching for a business combination target and its only liquid asset is the money held in its 
operating bank account, which is designated to fund that search.  The money that African Gold 
raised in its IPO is secured in a trust account.  As such, one of African Gold’s most significant risks 
of material misstatement in its financial statements was the risk of fraud relating to African Gold’s 
operating bank account and cash disbursements.   
 
 3. Notwithstanding this risk, African Gold failed to devise and maintain internal 
accounting controls sufficient to provide reasonable assurance that transactions are recorded as 
necessary to permit preparation of financial statements in conformity with generally accepted 
accounting principles (“GAAP”).  For example, African Gold failed to implement basic 
segregation of duties or monitoring controls with respect to its operating bank account, cash 
disbursements and financial reporting more generally.  Rather, African Gold gave its former CFO 
                                                 
1
 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding 
on any other person or entity in this or any other proceeding.   
2
 On January 3, 2023, the Commission charged Cooper J. Morgenthau, African Gold’s former 
CFO, with violating several provisions of the federal securities laws related to misappropriating 
money from African Gold’s operating bank account and for lying to African Gold’s accountants 
and auditor, circumventing and/or knowingly failing to implement internal accounting controls, 
falsifying African Gold’s books and records, and filing false certifications with the 
Commission.  See Securities and Exchange Commission v. Cooper J. Morgenthau, 23-cv-00022-
NRB (S.D.N.Y. 2023).  On January 6, 2023, the Court entered a consent judgment, which enjoined 
Morgenthau from violating the relevant securities laws and rules and granted other relief sought by 
the Commission.  Relatedly, on January 3, 2023, Morgenthau pleaded guilty to one count of wire 
fraud, in violation of 18 U.S.C. § 1343, based on the same conduct alleged in the Commission’s 
complaint.  See United States v. Cooper J. Morgenthau, 23-cr-002 (S.D.N.Y. 2023). 

 3 
control over nearly all aspects of its financial reporting process with little to no oversight by or 
involvement of other African Gold personnel.   
 
 4. African Gold’s failure to have sufficient internal accounting controls resulted in 
African Gold’s failure to timely prevent and detect the misappropriation of its only liquid asset—
the money held in its operating bank account, which it needed to fund its search for a business 
combination target.  This resulted in African Gold filing material misstatements in its Form 10-K 
filed with the Commission for the fiscal year ended December 31, 2021 and Forms 10-Q for the 
periods ended June 30, 2021, September 30, 2021 and March 31, 2022 (the “Financial Filings”).  
African Gold has since disclosed that the Financial Filings must be restated and should not be 
relied upon, but has not yet filed any restatements.   
 
 5. As a result of the conduct described in this Order , African Gold violated Sections 
13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 13a-1, 13a-13, 13a-15(a)-(b), 
and 12b-20 thereunder. 
Respondent 
 
6. African Gold Acquisition Corp. is a publicly traded special purpose acquisition 
company 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.   
 
Facts 
 
 7. On March 2, 2021, African Gold closed its IPO.  As of March 31, 2021, African 
Gold had approximately $1.5 million in its operating bank account to fund its search for a business 
combination target.  According to disclosures in African Gold’s public filings, the money held in 
African Gold’s operating bank account is its only liquid asset and is designated to fund its search 
for a business combination target.   
 
 8. African Gold failed to establish internal accounting controls sufficient to provide 
reasonable assurance that transactions are recorded as necessary to permit preparation of financial 
statements in conformity with GAAP.   
 
 9. For example, African Gold failed to establish sufficient segregation of duties and 
monitoring controls over its operating bank account and did not require African Gold personnel 
other than its former CFO to periodically monitor bank account activity, reconcile the bank 
account activity, or have responsibility for the record keeping of its assets, including in connection 
with African Gold’s quarterly reviews or annual audit.  Because African Gold failed to establish 
sufficient internal accounting controls, African Gold’s former CFO was able to make unauthorized 
withdrawals to himself and to otherwise use African Gold’s operating bank account as if it were his 
own personal account for over one year without detection.  African Gold’s insufficient internal 
controls also enabled its former CFO to alter African Gold’s bank account statements in order to 
conceal his unauthorized transactions and to fabricate the balance held in African Gold’s operating 
bank account, among other transactional details.  

 4 
 
 10. African Gold also failed to establish sufficient segregation of duties and monitoring 
controls over its cash disbursements.  As with its operating bank account, African Gold delegated 
all responsibility and control over its cash disbursements to its former CFO, with little to no 
established monitoring controls.  For example, only payments over $50,000 required the approval 
of someone other than its former CFO—a largely ineffective requirement given the nature of 
African Gold’s limited activities and expenses, as well as the lack of restrictions on the aggregate 
amounts that its former CFO was able to transfer without any oversight.  Indeed, with the 
exception of expenses paid in March 2021 in connection with its IPO, African Gold had no 
expenses over $50,000.  As a result, African Gold’s former CFO was able to make unauthorized 
withdrawals to himself totaling approximately $1.2 million and, with respect to various vendors 
who were providing services to African Gold, selectively determine which vendors to pay to avoid 
detection.  
 
 11.   In addition, African Gold failed to maintain ICFR and DCP, and further failed to 
evaluate DCP, as required for registrants like itself.  See Exchange Act Rules 13a-15(a), (b), (e) 
and (f).  African Gold had limited activities, and its only liquid asset was the money held in its 
operating bank account.  Accordingly, African Gold’s most significant risk of material 
misstatement stemmed from potential fraud by management.  Yet, African Gold had insufficient 
internal controls to timely prevent and detect fraud related to its operating bank account and cash 
disbursements in order to provide reasonable assurance that its financial reporting and related 
disclosures were accurate.   
 
 12. For example, African Gold had insufficient internal controls relating to the 
oversight and governance of financial reporting and related disclosures, or clearly specified 
financial reporting objectives and responsibilities.  Instead, African Gold delegated all aspects of 
its financial reporting processes to its former CFO—with no established monitoring controls or 
involvement by other African Gold personnel.  This enabled its former CFO to provide African 
Gold’s accountants and external auditor with false information, which formed the basis of African 
Gold’s financial filings and books and records.  In addition, African Gold’s management failed to 
evaluate the effectiveness of African Gold’s DCP, including with respect to the amount and 
sufficiency of its cash on-hand and the accuracy of its related disclosures. 
 
 13. African Gold’s Forms 10-Q for the quarters ended June 30, 2021, September 30, 
2021 and March 31, 2022 materially misstated the amount and sufficiency of cash available to 
fund African Gold’s ongoing search for a business combination target.  In addition, while African 
Gold’s Form 10-K for the fiscal year ended December 31, 2021 accurately reflected the amount of 
cash available to fund its ongoing search for a business combination target as of December 31, 
2021, the disclosures were materially misleading in light of the fact that its operating bank account 
held negative balances from December 1 until December 31, 2021, when its former CFO 
temporarily deposited $549,146 into the account.  African Gold’s CFO subsequently withdrew the 
entire amount deposited on December 31, 2021 in a series of transactions beginning the following 
business day, leaving African Gold with no money to fund its search for a business combination 
target.  In addition, African Gold’s Form 10-K for the fiscal year ended December 31, 2021 failed 
to disclose the amount of losses due to its former CFO’s fraud, the impact of which was material to 
its financial statements. 

 5 
Summary of African Gold Quarterly Reported Cash vs. Actual Cash in Bank Account 
 
 
Q2 FY 2021 Q3 FY 2021 YE 2021 Q1 FY 2022 
Reported Cash $1,251,503 $932,771 $544,103 $432,819 
Actual Cash $101,303 $104,371 $544,103
.
 $(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% 
 
 14. African Gold has disclosed that the Financial Filings must be restated and should 
not be relied upon, but has not yet filed any restated financials.  African Gold has also failed to file 
its Forms 10-Q for the quarters ended June 30, 2022 and September 30, 2022.  
 
15. African Gold did not discover the misappropriation of its assets through any form 
of self-policing or as the result of its internal controls.  African Gold only suspected issues with its 
operating bank account when certain critical vendors refused to provide services because their 
invoices remained unpaid, at which point African Gold personnel sought to confirm its former 
CFO’s representations regarding the balance held in African Gold’s operating bank account and 
transaction activity.  However, no African Gold personnel other than its former CFO had active 
access to the operating bank account, and the other personnel were unable to access the account to 
assess the possibility of fraud.  
 
Violations 
 
 16. As a result of the conduct described above, African Gold violated Section 13(a) of 
the Exchange Act and Rules 13a-1, 13a-13 and 12b-20 thereunder, which require Exchange Act 
reporting companies to file with the Commission complete and accurate annual and quarterly 
reports and that such reports contain further material information as may be necessary to make the 
required statements not misleading. 
 
 17. In addition, as a result of the conduct described above, African Gold violated 
Section 13(b)(2)(A) of the Exchange Act, which requires Exchange Act reporting companies to 
make and keep books, records, and accounts which, in reasonable detail, accurately and fairly 
reflect their transactions and dispositions of their assets. 
 
 18. In addition, as a result of the conduct described above, African Gold violated 
Section 13(b)(2)(B) of the Exchange Act, which, among other things, requires Exchange Act 
reporting companies to devise and maintain a system of internal accounting controls sufficient to 
provide reasonable assurance that transactions are recorded as necessary to permit preparation of 
financial statements in accordance with GAAP, or any other criteria applicable to such statements. 
 
 19. In addition, as a result of the conduct described above, African Gold violated 
Exchange Act Rule 13a-15(a) which requires Exchange Act reporting companies to maintain ICFR 

 6 
and DCP, as well as Exchange Act Rule 13a-15(b) which requires Exchange Act reporting 
companies to evaluate the effectiveness of DCP. 
 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent’s Offer. 
 
 Accordingly, it is hereby ORDERED that: 
 
 A. Pursuant to Section 21C of the Exchange Act, Respondent cease and desist from 
committing or causing any violations and any future violations of Sections 13(a), 13(b)(2)(A) and 
13(b)(2)(B) of the Exchange Act and Rules 13a-1, 13a-13, 13a-15(a)-(b) and 12b-20 thereunder. 
 
B. Respondent shall, within 10 days of the entry of this Order, pay a civil money 
penalty in the amount of $103,591 to the Securities and Exchange Commission for transfer to the 
general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3). If timely 
payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.   
 
Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Respondent as a Respondent in these proceedings, and the file number of these proceedings; a 
copy of the cover letter and check or money order must be sent to John Dugan, Division of 
Enforcement, Securities and Exchange Commission, 33 Arch Street, 24th Floor, Boston, MA  
02110. 
 
 C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

 7 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 
the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 
Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 
an additional civil penalty and shall not be deemed to change the amount of the civil penalty 
imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 
private damages action brought against Respondent by or on behalf of one or more investors based 
on substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
Secretary 
 
 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No.  96960 / February 22, 2023 

 

ACCOUNTING AND AUDITING ENFORCEMENT 

Release No.  4377 / February 22, 2023 

 

ADMINISTRATIVE PROCEEDING 

File No.  3-21309 

 

In the Matter of 

 

AFRICAN GOLD 

ACQUISITION CORP., 

 

Respondent. 

 

 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER  

  

I. 
 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-

and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”), against African Gold Acquisition Corp. (“African Gold” 

or “Respondent”).   

 

II. 
 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over it and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-

and-Desist Proceedings pursuant to Section 21C of the Securities Exchange Act of 1934, Making 

Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below.   

 



 2 

III. 
 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that:  

 

Summary 

 

1. African Gold is a publicly traded special purpose acquisition company (“SPAC”).  

Since the closing of its initial public offering (“IPO”) of securities on March 2, 2021 until late 

2022, African Gold failed properly to devise and maintain a sufficient system of internal 

accounting controls and also failed to maintain internal control over financial reporting (“ICFR”) 

and disclosure controls and procedures (“DCP”) as required.  African Gold’s failure to implement 

sufficient internal controls enabled its former chief financial officer (“CFO”) to misappropriate 

nearly all of the money in African Gold’s operating bank account and to otherwise effectively use 

African Gold’s operating bank account as his own personal account for over one year.2  As a result, 

African Gold materially misstated the financial information in several required financial filings 

with the Commission.  African Gold’s former CFO did not have access to African Gold’s trust 

account and did not misappropriate any funds from the trust account. 

 

 2. According to disclosures in its public filings, African Gold’s activities are limited to 

searching for a business combination target and its only liquid asset is the money held in its 

operating bank account, which is designated to fund that search.  The money that African Gold 

raised in its IPO is secured in a trust account.  As such, one of African Gold’s most significant risks 

of material misstatement in its financial statements was the risk of fraud relating to African Gold’s 

operating bank account and cash disbursements.   

 

 3. Notwithstanding this risk, African Gold failed to devise and maintain internal 

accounting controls sufficient to provide reasonable assurance that transactions are recorded as 

necessary to permit preparation of financial statements in conformity with generally accepted 

accounting principles (“GAAP”).  For example, African Gold failed to implement basic 

segregation of duties or monitoring controls with respect to its operating bank account, cash 

disbursements and financial reporting more generally.  Rather, African Gold gave its former CFO 

                                                 
1 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding 

on any other person or entity in this or any other proceeding.   
2 On January 3, 2023, the Commission charged Cooper J. Morgenthau, African Gold’s former 

CFO, with violating several provisions of the federal securities laws related to misappropriating 

money from African Gold’s operating bank account and for lying to African Gold’s accountants 

and auditor, circumventing and/or knowingly failing to implement internal accounting controls, 

falsifying African Gold’s books and records, and filing false certifications with the 

Commission.  See Securities and Exchange Commission v. Cooper J. Morgenthau, 23-cv-00022-

NRB (S.D.N.Y. 2023).  On January 6, 2023, the Court entered a consent judgment, which enjoined 

Morgenthau from violating the relevant securities laws and rules and granted other relief sought by 

the Commission.  Relatedly, on January 3, 2023, Morgenthau pleaded guilty to one count of wire 

fraud, in violation of 18 U.S.C. § 1343, based on the same conduct alleged in the Commission’s 

complaint.  See United States v. Cooper J. Morgenthau, 23-cr-002 (S.D.N.Y. 2023). 



 3 

control over nearly all aspects of its financial reporting process with little to no oversight by or 

involvement of other African Gold personnel.   

 

 4. African Gold’s failure to have sufficient internal accounting controls resulted in 

African Gold’s failure to timely prevent and detect the misappropriation of its only liquid asset—

the money held in its operating bank account, which it needed to fund its search for a business 

combination target.  This resulted in African Gold filing material misstatements in its Form 10-K 

filed with the Commission for the fiscal year ended December 31, 2021 and Forms 10-Q for the 

periods ended June 30, 2021, September 30, 2021 and March 31, 2022 (the “Financial Filings”).  

African Gold has since disclosed that the Financial Filings must be restated and should not be 

relied upon, but has not yet filed any restatements.   

 

 5. As a result of the conduct described in this Order , African Gold violated Sections 

13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 13a-1, 13a-13, 13a-15(a)-(b), 

and 12b-20 thereunder. 

Respondent 

 

6. African Gold Acquisition Corp. is a publicly traded special purpose acquisition 

company 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.   

 

Facts 

 

 7. On March 2, 2021, African Gold closed its IPO.  As of March 31, 2021, African 

Gold had approximately $1.5 million in its operating bank account to fund its search for a business 

combination target.  According to disclosures in African Gold’s public filings, the money held in 

African Gold’s operating bank account is its only liquid asset and is designated to fund its search 

for a business combination target.   

 

 8. African Gold failed to establish internal accounting controls sufficient to provide 

reasonable assurance that transactions are recorded as necessary to permit preparation of financial 

statements in conformity with GAAP.   

 

 9. For example, African Gold failed to establish sufficient segregation of duties and 

monitoring controls over its operating bank account and did not require African Gold personnel 

other than its former CFO to periodically monitor bank account activity, reconcile the bank 

account activity, or have responsibility for the record keeping of its assets, including in connection 

with African Gold’s quarterly reviews or annual audit.  Because African Gold failed to establish 

sufficient internal accounting controls, African Gold’s former CFO was able to make unauthorized 

withdrawals to himself and to otherwise use African Gold’s operating bank account as if it were his 

own personal account for over one year without detection.  African Gold’s insufficient internal 

controls also enabled its former CFO to alter African Gold’s bank account statements in order to 

conceal his unauthorized transactions and to fabricate the balance held in African Gold’s operating 

bank account, among other transactional details.  



 4 

 

 10. African Gold also failed to establish sufficient segregation of duties and monitoring 

controls over its cash disbursements.  As with its operating bank account, African Gold delegated 

all responsibility and control over its cash disbursements to its former CFO, with little to no 

established monitoring controls.  For example, only payments over $50,000 required the approval 

of someone other than its former CFO—a largely ineffective requirement given the nature of 

African Gold’s limited activities and expenses, as well as the lack of restrictions on the aggregate 

amounts that its former CFO was able to transfer without any oversight.  Indeed, with the 

exception of expenses paid in March 2021 in connection with its IPO, African Gold had no 

expenses over $50,000.  As a result, African Gold’s former CFO was able to make unauthorized 

withdrawals to himself totaling approximately $1.2 million and, with respect to various vendors 

who were providing services to African Gold, selectively determine which vendors to pay to avoid 

detection.  

 

 11.   In addition, African Gold failed to maintain ICFR and DCP, and further failed to 

evaluate DCP, as required for registrants like itself.  See Exchange Act Rules 13a-15(a), (b), (e) 

and (f).  African Gold had limited activities, and its only liquid asset was the money held in its 

operating bank account.  Accordingly, African Gold’s most significant risk of material 

misstatement stemmed from potential fraud by management.  Yet, African Gold had insufficient 

internal controls to timely prevent and detect fraud related to its operating bank account and cash 

disbursements in order to provide reasonable assurance that its financial reporting and related 

disclosures were accurate.   

 

 12. For example, African Gold had insufficient internal controls relating to the 

oversight and governance of financial reporting and related disclosures, or clearly specified 

financial reporting objectives and responsibilities.  Instead, African Gold delegated all aspects of 

its financial reporting processes to its former CFO—with no established monitoring controls or 

involvement by other African Gold personnel.  This enabled its former CFO to provide African 

Gold’s accountants and external auditor with false information, which formed the basis of African 

Gold’s financial filings and books and records.  In addition, African Gold’s management failed to 

evaluate the effectiveness of African Gold’s DCP, including with respect to the amount and 

sufficiency of its cash on-hand and the accuracy of its related disclosures. 

 

 13. African Gold’s Forms 10-Q for the quarters ended June 30, 2021, September 30, 

2021 and March 31, 2022 materially misstated the amount and sufficiency of cash available to 

fund African Gold’s ongoing search for a business combination target.  In addition, while African 

Gold’s Form 10-K for the fiscal year ended December 31, 2021 accurately reflected the amount of 

cash available to fund its ongoing search for a business combination target as of December 31, 

2021, the disclosures were materially misleading in light of the fact that its operating bank account 

held negative balances from December 1 until December 31, 2021, when its former CFO 

temporarily deposited $549,146 into the account.  African Gold’s CFO subsequently withdrew the 

entire amount deposited on December 31, 2021 in a series of transactions beginning the following 

business day, leaving African Gold with no money to fund its search for a business combination 

target.  In addition, African Gold’s Form 10-K for the fiscal year ended December 31, 2021 failed 

to disclose the amount of losses due to its former CFO’s fraud, the impact of which was material to 

its financial statements. 



 5 

Summary of African Gold Quarterly Reported Cash vs. Actual Cash in Bank Account 

 

 Q2 FY 2021 Q3 FY 2021 YE 2021 Q1 FY 2022 

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

Actual Cash $101,303 $104,371 $544,103. $(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% 

 

 14. African Gold has disclosed that the Financial Filings must be restated and should 

not be relied upon, but has not yet filed any restated financials.  African Gold has also failed to file 

its Forms 10-Q for the quarters ended June 30, 2022 and September 30, 2022.  

 

15. African Gold did not discover the misappropriation of its assets through any form 

of self-policing or as the result of its internal controls.  African Gold only suspected issues with its 

operating bank account when certain critical vendors refused to provide services because their 

invoices remained unpaid, at which point African Gold personnel sought to confirm its former 

CFO’s representations regarding the balance held in African Gold’s operating bank account and 

transaction activity.  However, no African Gold personnel other than its former CFO had active 

access to the operating bank account, and the other personnel were unable to access the account to 

assess the possibility of fraud.  

 

Violations 

 

 16. As a result of the conduct described above, African Gold violated Section 13(a) of 

the Exchange Act and Rules 13a-1, 13a-13 and 12b-20 thereunder, which require Exchange Act 

reporting companies to file with the Commission complete and accurate annual and quarterly 

reports and that such reports contain further material information as may be necessary to make the 

required statements not misleading. 

 

 17. In addition, as a result of the conduct described above, African Gold violated 

Section 13(b)(2)(A) of the Exchange Act, which requires Exchange Act reporting companies to 

make and keep books, records, and accounts which, in reasonable detail, accurately and fairly 

reflect their transactions and dispositions of their assets. 

 

 18. In addition, as a result of the conduct described above, African Gold violated 

Section 13(b)(2)(B) of the Exchange Act, which, among other things, requires Exchange Act 

reporting companies to devise and maintain a system of internal accounting controls sufficient to 

provide reasonable assurance that transactions are recorded as necessary to permit preparation of 

financial statements in accordance with GAAP, or any other criteria applicable to such statements. 

 

 19. In addition, as a result of the conduct described above, African Gold violated 

Exchange Act Rule 13a-15(a) which requires Exchange Act reporting companies to maintain ICFR 



 6 

and DCP, as well as Exchange Act Rule 13a-15(b) which requires Exchange Act reporting 

companies to evaluate the effectiveness of DCP. 

 

IV. 

 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent’s Offer. 

 

 Accordingly, it is hereby ORDERED that: 

 

 A. Pursuant to Section 21C of the Exchange Act, Respondent cease and desist from 

committing or causing any violations and any future violations of Sections 13(a), 13(b)(2)(A) and 

13(b)(2)(B) of the Exchange Act and Rules 13a-1, 13a-13, 13a-15(a)-(b) and 12b-20 thereunder. 

 

B. Respondent shall, within 10 days of the entry of this Order, pay a civil money 

penalty in the amount of $103,591 to the Securities and Exchange Commission for transfer to the 

general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3). If timely 

payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.   

 

Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Respondent as a Respondent in these proceedings, and the file number of these proceedings; a 

copy of the cover letter and check or money order must be sent to John Dugan, Division of 

Enforcement, Securities and Exchange Commission, 33 Arch Street, 24th Floor, Boston, MA  

02110. 

 

 C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

http://www.sec.gov/about/offices/ofm.htm


 7 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 

the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 

Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 

an additional civil penalty and shall not be deemed to change the amount of the civil penalty 

imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 

private damages action brought against Respondent by or on behalf of one or more investors based 

on substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

Secretary