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 Financial, Isaac rebuked these statements, dissociating himself from the company’s leadership team.
Looking into the matter, BeInCrypto uncovered that Isaac and Alt5 Sigma, which used to be branded as JanOne Incorporated, are part of another ongoing SEC investigation. In 2021, the regulator charged Isaac with financial and disclosure fraud.
An Investigation into Alt5 Sigma
Earlier this week, news broke that Alt5 Sigma, a company involved in a $1.5 billion deal with US President Donald Trump’s World Liberty Financial, was reportedly being investigated by the Securities and Exchange Commission (SEC) over potential fraud.
The assertion stemmed from a news report published by The Information. The report alleged that Jon Isaac, the company’s presumed president, engaged in deceptive behavior, including earnings inflation and stock manipulation.
At this stage, the SEC has not confirmed the existence of any new probe into Alt5 Sigma. BeInCrypto did not manage to track down the filing. It did, however, find another complaint that the SEC filed against Isaac in 2021.
The Ongoing SEC Case Against Live Ventures
Isaac is a Las Vegas-based venture capitalist and entrepreneur who currently serves as the CEO of Live Ventures Incorporated, a publicly traded company.
Following this week’s allegations against 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 post, he denied having any leadership role with Alt5 Sigma, clarifying that he currently only operates as the head of Live Ventures. He did, however, admit to owning over 1 million shares of Alt5 Sigma.
On its part, Alt5 Sigma used its own social media to clarify that it “has no knowledge of any current investigation regarding its activities by the US SEC.”
However, the posts omit key details. On its website, Alt5 Sigma currently lists Tony Isaac, Jon Isaac’s father, as the company’s director. While Tony Isaac has not been named as a defendant in the SEC’s complaint, his governance role links the family directly to Alt5 Sigma.
In 2021, the SEC charged Live Ventures and JanOne, another publicly traded company, with a series of fraudulent misrepresentations.
Jon and Tony Isaac are directly implicated in the complaint: Jon as the CEO of Live Ventures, and Tony as the CEO of JanOne and a member of Live’s board of directors. In 2024, JanOne rebranded itself to Alt5 Sigma.
The accusations made by the SEC against both companies are extensive.
Allegations of Inflated Earnings and Stock Manipulation
In August 2021, the SEC formally charged Jon Isaac and Live Ventures with multiple reporting violations. These include inflated income and earnings per share, stock promotion and secret trading, and undisclosed executive compensation.
The filing also implicated Virland Johnson, Live and JanOne’s chief financial officer, for allegedly aiding and abetting Isaac.
Despite BeInCrypto’s repeated attempts to confirm with the SEC whether the investigation is ongoing, it did not receive an immediate response. According to public documents, however, the case remains active.
To put the timeline into context, the SEC alleges that in 2016 Isaac engineered a transaction to raise Live Ventures’ fiscal-year earnings. It argued that Isaac’s maneuver deceptively created the appearance that negotiations had started before the year’s end.
The deal reportedly created $915,500 worth of fraudulent “other income” and increased Live’s 2016 pre-tax income by 20%.
According to the SEC, Isaac profited from the resulting spike in Live’s stock. During this time, Live Ventures communicated in a press release that 2016 represented the company’s most successful year.
Live Ventures LIVE Stock Performance Between 2016 and 2017. Source: NASDAQ.The regulator alleged that Live and Isaac overstated earnings per share by 40% by improperly understating the company’s outstanding share count.
Furthermore, the SEC claimed that Isaac hired a stock promoter to boost interest in Live Ventures, compounding the market impact.
According to court documents filed with the Nevada Federal District Court, Isaac’s legal team strongly denies and disputes these allegations. Independent of the complaint, Live’s stock increased significantly in the final months of 2016.
A Case of Overcompensation and Underreporting
The SEC investigation also alleged that Live Ventures, Isaac, and Johnson misrepresented the date on which Live acquired ApplianceSmart, a new subsidiary of JanOne Incorporated.
Following the acquisition, Live Ventures allegedly recognized a “bargain purchase gain” of over $3.7 million in the first quarter of 2018. This gain represents a profit recorded when a company buys another business for less than the value of its assets. The SEC alleged that Live Ventures would have had an unprofitable quarter without it.
The complaint further alleged that Isaac underreported his executive compensation in key disclosure documents presented before Live Venture’s shareholders.
According to the SEC, the company reported that Isaac received only $162,000 of additional compensation between 2016 and 2018.
In reality, he had apparently received nearly twice that amount.
Isaac’s Continued Relationship with Alt5 Sigma
Though the investigation against Isaac is ongoing, the SEC is asking that, if found guilty, Jon Isaac and Johnson be barred from acting as officers or directors of a public issuer.
Since Tony Isaac is only referenced as a related person in the complaint and is not listed as a defendant, these requests would not apply to him.
Despite not having a direct leadership role with Alt5 Sigma, a document the company filed with the SEC in 2024 proves that a formal business relationship between Isaac, Johnson, Live Ventures, and Alt5 Sigma exists.
The filing details a two-year Consulting Agreement between Isaac and Alt5 Sigma that began in March 2024. Isaac’s responsibilities include providing strategic financial advice, sales and business development guidance, and holding weekly calls with management.
It also revealed that Isaac Capital Group and Live Ventures were Alt5 Sigma creditors when it operated as JanOne.
Isaac’s promissory note debt was converted into 465,753 shares in December 2024. This conversion underscores that Isaac remains a significant shareholder, keeping his financial interests tied to Alt5 Sigma even as he distances himself publicly.
Meanwhile, Alt5 Sigma’s website does not list Johnson in a leadership role.
However, Johnson signed the 2024 SEC filing in March 2025 as the company’s chief financial officer.
The post World Liberty Financial’s $1.5 Billion Partner Denies SEC Fraud, Records Suggest Otherwise appeared first on BeInCrypto.
Source: https://beincrypto.com/world-liberty-financial-alt5-sigma-sec-fraud-allegations/
