Eric Trump Excluded from ALT5 Sigma Board Following Nasdaq Review

Eric Trump will not be joining the board of fintech company Alt5 Sigma as originally planned. Instead, he has been designated as a board observer after discussions with Nasdaq, according to a report by Forbes on September 9.

Key Takeaways:

Eric Trump has been removed from the Alt5 Sigma board and will instead act as a board observer.
This change follows Nasdaq’s review and the adjustment of a deal with Trump-linked World Liberty Financial (WLFI).
WLFI co-founder Zak Folkman has been nominated for a directorship, pending stockholder approval.
Alt5 Sigma is facing legal issues, including a court ruling related to money laundering involving its Canadian subsidiary.
The World Liberty Financial token has recently begun trading and experienced a downturn in value.

Eric Trump removed from Alt5 Sigma board Nasdaq

Changes in Board Structure

Originally, Alt5 Sigma announced in August that Eric Trump would assume a director position as part of its $1.5 billion share sale initiative linked to WLFI. However, the company has since reported to the Securities and Exchange Commission (SEC) that Trump will only serve as a board observer moving forward.

The restructured plan includes the promotion of Zak Folkman, co-founder and chief operating officer of WLFI, to a directorship, pending approval from stockholders. Alt5 Sigma did not reveal which Nasdaq listing rule necessitated this change, and there have been no comments from Alt5, WLFI, or Eric Trump regarding this matter. Nasdaq has also refrained from providing additional details.

Ownership Stakes and Legal Challenges

The Trump-related LLC associated with WLFI holds approximately 38% of the venture and owns 22.5 billion WLFI tokens, enabling it to claim around 75% of the proceeds from token sales.

In addition to the personnel changes, the SEC filing highlighting Trump’s revised role also indicates that Alt5 Sigma is grappling with legal challenges. A Rwandan court recently ruled against its Canadian subsidiary and a former key executive for money laundering and illicit enrichment, resulting in a $3.5 million seizure of assets and the dissolution of the subsidiary. Alt5 Sigma is currently appealing this court decision, stating that it was only made aware of the ruling in late August.

Moreover, Alt5 Sigma reported receiving a summons in relation to a bankruptcy case involving its former chief financial officer, who allegedly neglected to disclose restricted stock units valued at 330,000 shares. U.S. trustees are aiming to recover these shares or their equivalent value.

Market Performance of WLFI Token

WLFI, which launched in 2024 as a decentralized finance platform associated with Trump, saw its token start trading in early September. As of the latest information, the World Liberty Financial token is priced at $0.2039, reflecting an 11% decline over the past week and a significant drop of about 38% from its all-time high.

In a positive note for Alt5 Sigma, its share of 7.3 billion tokens, purchased at a price of $0.18 each, has gained over $200 million in value, bringing its total holdings close to $1.5 billion.