ALT5 Sigma denied a report suggesting one of its executives was being investigated by the SEC for insider trading tied to the Trump family’s World Liberty Financial.
ALT5 Sigma, a new investment partner of the Trump family’s World Liberty Financial, denied a recent report suggesting one of its executives was being probed by the US Securities and Exchange Commission.
Rumors spread on Tuesday that the SEC had launched a probe into venture capitalist Jon Isaac over alleged earnings inflation and insider share sales tied to ALT5’s recent $1.5 billion treasury deal with Trump’s crypto platform.
ALT5 Sigma took to X hours later, denying that Isaac was either a current or former president or adviser to the company, and stating that it was unaware of any current investigation into its activities by the securities regulator.
Isaac also took to X on Tuesday, stating he wasn’t the president of ALT5 and was not being investigated by the SEC. Reports of an investigation first surfaced in an article from The Information posted on Tuesday.
“These reports appear to contain significant factual errors regarding my role and current regulatory status.”
The fuss adds to mounting scrutiny of US President Donald Trump’s World Liberty Financial and its affiliates, which have already faced widespread accusations of insider trading and market manipulation.
The report also triggered a 10.5% fall in ALT5’s (ALTS) share price to $10.48, according to Yahoo Finance data.
In after-hours trading, ALTS dropped further to $5.39, which is below its price on Aug. 12 when the company announced it would sell 200 million common shares for $1.5 billion to kickstart WLF’s corporate treasury.
Jon Isaac confirms he is an ALT5 shareholder
Isaac said that he “took over” ALT5’s predecessor, JanOne, some time ago, but left before it went public via a merger in the US and rebranded to ALT5 in 2024.
He currently serves as CEO of the closely affiliated investment firm Live Ventures but remains an ALT5 shareholder, holding more than 1 million shares valued at over $5.48 million.
“I am a big believer and supporter of ALT5 Sigma, want nothing but the best for the company,” Isaac said, while noting that he continues to buy ALT shares daily.
Live Ventures records show that ALT5’s president and chairman is Tony Isaac, the father of Jon. ATL5’s website, however, lists Tony Isaac as a director of the company.
SEC filing tells a different story
However, an SEC filing from December shows ALT5 Sigma entered into a two-year consulting agreement with Jon Isaac in March 2024, in which he would provide strategic business development and financial advice.
His responsibilities supposedly included advising on growth strategies, financial restructuring, client acquisition, new product development and conducting market research.
He was also tasked with holding “weekly update calls” with management to ensure the company was progressing toward its goals.
The filing also showed that, under the terms of his consulting agreement, Isaac held a $540,000 promissory note. He later converted the note, plus accrued interest, into 465,753 ALT5 Sigma shares on Dec. 23, 2024.
Cointelegraph reached out to the ALT5, WLF and the SEC for comment but hasn’t received any responses.
SEC has filed complaints against Jon Isaac in the past
In 2021, the SEC filed a civil complaint against Jon Isaac and his current and former companies — Live Ventures and JanOne — accusing them of financial and disclosure fraud.
The allegations included inflating earnings, backdating contracts and concealing stock sales through a nominee account.
Isaac and the companies denied wrongdoing, and the case remains active in federal court in Nevada.
Source: https://cointelegraph.com/tags/blockchain
