Alt5 Sigma has disclosed conflicting information to US regulators regarding the timing of its accountant’s resignation, marking the second apparent inconsistency in the Trump-linked crypto firm’s filings with the Securities and Exchange Commission in recent weeks.
Conflicting disclosures
Alt5 Sigma informed the SEC on Black Friday that its independent auditor, Hudgens CPA, PLLC, resigned on Nov. 21 with immediate effect due to the retirement of its sole partner. However, William Hudgens, the firm’s partner, said he notified Alt5 Sigma before June 30 that he would step down after the company’s second-quarter filing, which was submitted on Aug. 12.
Hudgens said the decision was not related to retirement but to his firm’s exit from auditing public companies. He added that Alt5 Sigma had ample notice and that his firm had discussed potential successor auditors, though he did not believe the company had engaged any of them.
Alt5 Sigma has yet to file its third-quarter report. In a Nov. 12 filing, the company said the delay was partly due to issues related to the “timeliness and responsiveness” of its accountant. When asked who served as its auditor at the time of that filing, an Alt5 Sigma spokesperson declined to comment.
Under SEC rules, public companies must notify regulators within four business days when their independent accountant resigns, and auditors must review interim financial statements included in quarterly reports.
Key uncertainty
It remains unclear why Alt5 Sigma told the SEC it learned of its auditor’s resignation on Nov. 21 when the accountant says the company was informed months earlier. The firm has not disclosed whether it has hired a replacement or clarified which auditor it relied on while citing accounting delays for its late filing.
Regulatory scrutiny
Legal experts said the discrepancies could draw regulatory attention. Securities law professor James Park described the situation as problematic, noting that delaying a quarterly filing heightens concerns about disclosure failures. Alan Palmiter, a professor emeritus of securities law, said he could not identify circumstances under which failing to disclose an accountant’s resignation within the required timeframe would be acceptable to regulators.
Neither the SEC nor Nasdaq responded to inquiries. The SEC is currently chaired by Paul Atkins, a Trump appointee.
Second discrepancy
The accounting issue follows another recent filing inconsistency. Alt5 Sigma disclosed that its board suspended CEO Peter Tassiopoulos effective Oct. 16, but an internal email sent to employees on Sept. 4 indicated he had already been placed on temporary leave weeks earlier. That message said a special board committee was investigating unspecified company matters and that other executives had also been placed on leave.
Under SEC rules, companies must disclose within four business days when a senior executive effectively stops serving in their role. Legal experts noted that materially misleading filings can violate anti-fraud laws, though such cases can be difficult to prove.
Corporate shake-up
After markets closed the day before Thanksgiving, Alt5 Sigma announced multiple leadership changes, including terminating its acting CEO and CFO without cause, ending its chief operating officer’s consulting agreement, accepting a board resignation, and disbanding the special committee after it presented its findings.
Trump-linked crypto ties
Alt5 Sigma is closely connected to World Liberty Financial, a crypto venture co-founded by President Donald Trump and his three sons. In August, Alt5 Sigma announced plans to raise $1.5 billion and build a treasury of World Liberty Financial tokens as part of a deal that also granted Trump-affiliated entities significant equity and governance rights.
World Liberty Financial acquired shares and warrants in Alt5 Sigma using cryptocurrency rather than cash, while Alt5 Sigma raised additional funds through a registered stock offering. The arrangement allowed World Liberty Financial to appoint board members and observers, though adjustments were later made to comply with Nasdaq rules.
Big picture
Alt5 Sigma holds billions of World Liberty Financial tokens, valued at more than five times its market capitalization, despite the company’s stock having fallen roughly 80% since the deal was announced.
Background
Founded nearly five decades ago as an appliance recycling business, Alt5 Sigma has undergone multiple transformations, including stints in retail, recycling, biotech, and now blockchain-based financial services. It adopted its current name in 2024 after acquiring a blockchain fintech firm established in 2018.
Meanwhile, SEC enforcement actions against public accountants have fallen to their lowest levels in recent years, according to industry analysis.
