Topline
Alt5 Sigma, a partner of the Trump family’s World Liberty Financial crypto venture, informed the Securities and Exchange Commission it suspended its CEO effective Oct. 16—but an internal email reviewed by Forbes shows the board placed him on “temporary leave” by Sept. 4, more than six weeks earlier, a discrepancy securities regulation experts say could violate disclosure rules.
World Liberty Financial co-founders Donald Trump Jr., Zach Witkoff and Eric Trump celebrate the partnership between their venture and ALT5 Sigma by ringing Nasdaq’s opening bell on Aug. 13. (Photo by Spencer Platt/Getty Images)
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Key Facts
Alt5 Sigma [Nasdaq: ALTS] said its board suspended CEO Peter Tassiopoulos effective Oct. 16 without explaining the move in a filing it made with the SEC four business days later.
An internal email sent to employees on Sept. 4—six weeks earlier—says the board had placed Tassiopoulos on temporary leave by that day, according to a copy shown to Forbes by two sources close to the company.
That message, sent by Alt5 Sigma’s chief operations officer and director Ron Pitters and signed by director David Danziger, said a special board committee was investigating unspecified “certain matters concerning the company” and that chief revenue officer Vay Tham also had been placed on leave.
Under SEC rules, public companies must report within four business days when their executive officer effectively stops serving in that role, and experts told Forbes that materially false or misleading filings can violate anti-fraud laws, although establishing such a violation can be difficult.
A World Liberty Financial attorney told Forbes that Tassiopoulos remains an Alt5 Sigma employee and is also still on its board, while an Alt5 Sigma spokesperson said its board’s special committee is investigating, among other matters, a subsidiary’s legal troubles in Rwanda—where it was found criminally liable for illicit enrichment and money laundering, a verdict it is appealing while claiming it was the victim of fraud—though the company did not say whether that issue led to the executives being placed on temporary leave.
Publicly traded Alt5 Sigma accumulated $1.5 billion of World Liberty Financial cryptocurrency in August as part of a circular deal that routed more than an estimated $500 million to an entity affiliated with President Donald Trump.
Tassiopoulos and Pitters declined to comment, and Danziger and Tham did not respond to inquiries.
What We Don’t Know
It’s unclear why the company told the SEC the suspension was effective Oct. 16 when the internal email says Tassiopoulos was placed on temporary leave by Sept. 4, as well as whether the company was required to notify the SEC about Tham’s temporary leave. It also remains a mystery why they were placed on leave, whether they will be reinstated or if regulators will scrutinize the apparent disclosure discrepancy.
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