Letter calls for probe into undisclosed criminal sanctions, governance failures, and ties to Trump-linked crypto venture

WASHINGTON, D.C. — Democracy Defenders Fund (DDF), a nonpartisan watchdog organization that fights corruption and abuses of power, joined Platkin LLP, a mission-driven law firm founded by former New Jersey Attorney General Matthew J. Platkin, in urging the U.S. Securities and Exchange Commission (SEC) to open an investigation into ALT5 Sigma Corporation (“ALTS”) over potential violations of federal securities laws. The letter to SEC Chairman Paul Atkins lays out serious compliance failures, governance breakdowns, and troubling financial ties between ALTS and World Liberty Financial (WLF), a crypto venture linked to President Donald Trump, his family, and his close associates.

In August 2025, ALTS announced that it had secured $1.5 billion through a combination of a registered direct public offering and a private placement of common stock. ALTS then made a $750 million purchase of WLF’s $WLFI governance tokens, steering private investor money directly into the pockets of the Trump family and their associates. The deal also coincided with leadership changes at ALTS, including the appointment of WLF CEO Zach Witkoff (son of United States Special Envoy to the Middle East Steve Witkoff) as Chairman of the Board and Eric Trump as a board member.

ALTS’s acquisition of $WLFI tokens raises significant questions regarding who the investors were that funded ALTS’s $WLFI acquisition, and whether those investors participated in ALTS’s capital raise purely to curry favor with the Trump administration.

In the months surrounding its deal with WLF, ALTS experienced countless internal disruptions and compliance issues. These included the unexplained suspension of its CEO, delayed financial filings that nearly led to Nasdaq delisting, multiple auditor changes within a matter of weeks, and the company’s failure to file its annual report on time. 

Despite the $1.5 billion capital influx from investors, ALTS experienced a dramatic decline in its share price, at times down approximately 80%. ALTS has now indicated it expects to report losses exceeding $340 million for fiscal year 2025.

The letter also details and raises concerns about how ALTS failed to disclose critical information to investors, including a criminal judgment against its Canadian subsidiary for illicit enrichment and money laundering. Public filings show the judgment was issued in May 2025 but not disclosed until weeks after the company’s major capital raise, depriving investors of key information.

“At stake here is the integrity of our financial system,” said Amb. Norm Eisen (ret.), co-founder and executive chair of Democracy Defenders Fund. “The pattern of conduct described here points to deeper concerns about oversight and transparency. Regulators have a responsibility to ensure that companies are meeting their obligations and that our markets are not influenced by political rent seekers."

“When a company raises billions from investors while failing to disclose serious compliance issues, and at the same time routes massive sums into politically connected entities, that should set off alarm bells, " said Matthew J. Platkin, Founding Partner of Platkin LLP. “Investors deserve to know whether the system is being used fairly—or manipulated. The SEC must act swiftly to investigate these issues, protect investors, and ensure that our financial markets are not used as vehicles for undisclosed risk, misconduct, or potential corruption.”

DDF and Platkin LLP are calling on the SEC to review ALTS’s compliance failures and protect investors from further harm. By taking this step, they seek to promote transparency, accountability, and investor protection in an increasingly complex financial landscape where emerging technologies and political influence intersect.

Read the letter to the SEC
Read a fact sheet outlining ALT5 Sigma Corp potential violations

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