World Liberty Financial’s $1.5 Billion Partner Denies SEC Fraud, Records Suggest Otherwise

After a report surfaced this week alleging that the SEC was investigating Jon Isaac for fraudulent practices in a billion-dollar deal between Alt5 Sigma and World Liberty Monetary, Isaac rebuked these statements, dissociating himself from the corporate’s management staff.

Trying into the matter, BeInCrypto uncovered that Isaac and Alt5 Sigma, which was branded as JanOne Integrated, are a part of one other ongoing SEC investigation. In 2021, the regulator charged Isaac with monetary and disclosure fraud.

An Investigation into Alt5 Sigma

Earlier this week, information broke that Alt5 Sigma, an organization concerned in a $1.5 billion take care of US President Donald Trump’s World Liberty Monetary, was reportedly being investigated by the Securities and Trade Fee (SEC) over potential fraud.

The assertion stemmed from a information report revealed by The Info. The report alleged that Jon Isaac, the corporate’s presumed president, engaged in misleading conduct, together with earnings inflation and inventory manipulation.

At this stage, the SEC has not confirmed the existence of any new probe into Alt5 Sigma. BeInCrypto didn’t handle to trace down the submitting. It did, nonetheless, discover one other grievance that the SEC filed in opposition to Isaac in 2021.

The Ongoing SEC Case In opposition to Stay Ventures

Isaac is a Las Vegas-based enterprise capitalist and entrepreneur who at the moment serves because the CEO of Stay Ventures Integrated, a publicly traded firm.

Following this week’s allegations in opposition to Isaac for his involvement in fraudulent practices over the Alt5 Sigma-WLFI deal, Isaac took to social media to refute the accusations.

In an X submit, he denied having any management position with Alt5 Sigma, clarifying that he at the moment solely operates as the pinnacle of Stay Ventures. He did, nonetheless, admit to proudly owning over 1 million shares of Alt5 Sigma.

On its half, Alt5 Sigma used its personal social media to make clear that it “has no data of any present investigation concerning its actions by the US SEC.”

Nevertheless, the posts omit key particulars. On its web site, Alt5 Sigma at the moment lists Tony Isaac, Jon Isaac’s father, as the corporate’s director. Whereas Tony Isaac has not been named as a defendant within the SEC’s grievance, his governance position hyperlinks the household on to Alt5 Sigma.

In 2021, the SEC charged Stay Ventures and JanOne, one other publicly traded firm, with a collection of fraudulent misrepresentations.

Jon and Tony Isaac are straight implicated within the grievance: Jon because the CEO of Stay Ventures, and Tony because the CEO of JanOne and a member of Stay’s board of administrators. In 2024, JanOne rebranded itself to Alt5 Sigma.

The accusations made by the SEC in opposition to each corporations are intensive.

Allegations of Inflated Earnings and Inventory Manipulation

In August 2021, the SEC formally charged Jon Isaac and Stay Ventures with a number of reporting violations. These embody inflated revenue and earnings per share, inventory promotion and secret buying and selling, and undisclosed govt compensation.

The submitting additionally implicated Virland Johnson, Stay and JanOne’s chief monetary officer, for allegedly aiding and abetting Isaac.

Regardless of BeInCrypto’s repeated makes an attempt to substantiate with the SEC whether or not the investigation is ongoing, it didn’t obtain an instantaneous response. Based on public paperwork, nonetheless, the case stays energetic.

To place the timeline into context, the SEC alleges that in 2016 Isaac engineered a transaction to lift Stay Ventures’ fiscal-year earnings. It argued that Isaac’s maneuver deceptively created the looks that negotiations had began earlier than the yr’s finish.

The deal reportedly created $915,500 price of fraudulent “different revenue” and elevated Stay’s 2016 pre-tax revenue by 20%.

Based on the SEC, Isaac profited from the ensuing spike in Stay’s inventory. Throughout this time, Stay Ventures communicated in a press launch that 2016 represented the corporate’s most profitable yr.

“Stay Ventures reported a document $79M in revenues, a rise of 136 p.c over the earlier yr, and internet revenue of roughly $17.82M, representing earnings per share (EPS) of $8.92,” the discharge learn.

The regulator alleged that Stay and Isaac overstated earnings per share by 40% by improperly understating the corporate’s excellent share depend.

Moreover, the SEC claimed that Isaac employed a inventory promoter to spice up curiosity in Stay Ventures, compounding the market affect.

Based on courtroom paperwork filed with the Nevada Federal District Court docket, Isaac’s authorized staff strongly denies and disputes these allegations. Impartial of the grievance, Stay’s inventory elevated considerably within the last months of 2016.

A Case of Overcompensation and Underreporting

The SEC investigation additionally alleged that Stay Ventures, Isaac, and Johnson misrepresented the date on which Stay acquired ApplianceSmart, a brand new subsidiary of JanOne Integrated.

Following the acquisition, Stay Ventures allegedly acknowledged a “cut price buy acquire” of over $3.7 million within the first quarter of 2018. This acquire represents a revenue recorded when an organization buys one other enterprise for lower than the worth of its belongings. The SEC alleged that Stay Ventures would have had an unprofitable quarter with out it.

The grievance additional alleged that Isaac underreported his govt compensation in key disclosure paperwork introduced earlier than Stay Enterprise’s shareholders.

Based on the SEC, the corporate reported that Isaac obtained solely $162,000 of extra compensation between 2016 and 2018.

In actuality, he had apparently obtained almost twice that quantity.

Isaac’s Continued Relationship with Alt5 Sigma

Although the investigation in opposition to Isaac is ongoing, the SEC is asking that, if discovered responsible, Jon Isaac and Johnson be barred from performing as workplacers or administrators of a public issuer.

Since Tony Isaac is just referenced as a associated individual within the grievance and isn’t listed as a defendant, these requests wouldn’t apply to him.

Regardless of not having a direct management position with Alt5 Sigma, a doc the corporate filed with the SEC in 2024 proves {that a} formal enterprise relationship between Isaac, Johnson, Stay Ventures, and Alt5 Sigma exists.

The submitting particulars a two-year Consulting Settlement between Isaac and Alt5 Sigma that started in March 2024. Isaac’s duties embody offering strategic monetary recommendation, gross sales and enterprise improvement steering, and holding weekly calls with administration.

It additionally revealed that Isaac Capital Group and Stay Ventures had been Alt5 Sigma collectors when it operated as JanOne.

Isaac’s promissory notice debt was transformed into 465,753 shares in December 2024. This conversion underscores that Isaac stays a big shareholder, protecting his monetary pursuits tied to Alt5 Sigma whilst he distances himself publicly.

In the meantime, Alt5 Sigma’s web site doesn’t checklist Johnson in a management position.

Nevertheless, Johnson signed the 2024 SEC submitting in March 2025 as the corporate’s chief monetary officer.

The submit World Liberty Monetary’s $1.5 Billion Accomplice Denies SEC Fraud, Information Counsel In any other case appeared first on BeInCrypto.