AMC Entertainment (NYSE: AMC) CEO Adam Aron found himself embroiled in a salacious texting scandal that unfolded over several weeks. A woman, using fake identities, attempted to extort him for a significant sum of money, resorting to sexually explicit images and messages as leverage.
The intricate web of deceit and blackmail, commonly referred to as a “catfishing” scam, came to light in a 2022 federal indictment against a Bronx woman, Sakoya Blackwood, who subsequently pleaded guilty in the summer. In these legal documents, Aron was identified as “Victim 1,” simply described as a public-company CEO, a fact later corroborated by individuals with knowledge of the case.
At the FBI’s direction, Aron chose to disclose the incident to AMC’s board once Blackwood had been sentenced in July, having already served her time. Aron stated on X (fka Twitter) Thursday, “Rather than give in to blackmail, I personally engaged counsel and other professional advisors and reported the matter to law enforcement. I did so knowing I risked personal embarrassment. But with my access to resources, if I did not stand up against blackmail, who could?”
AMC’s board, as confirmed in a statement to news site Semafor, engaged independent counsel from WilmerHale to investigate the situation and ultimately deemed it a personal matter that has since been resolved.
Aron, widely recognized for his role in the meme-stock phenomenon, where AMC shares surged alongside those of GameStop, BlackBerry, and other seemingly ailing companies, took on the moniker of “The Silverback” and emerged as a figurehead for a legion of retail investors known as “Apes.” These investors congregated on social media platforms in anticipation of the #MOASS or “mother of all short-squeezes,” which had the potential to financially decimate hedge funds betting against AMC stock.
“Unmentionable things”
In March 2022, Blackwood initiated contact with Aron, adopting the pseudonym “Mia” and sharing images of an individual her legal team later asserted was a 17-year-old Russian model (with no specific age confirmed by prosecutors). Aron, married since 1987, mistakenly believed her to be someone from a prior relationship, inquiring about her identity, including if she was a ballerina who had engaged in “unmentionable things” with him, as indicated in court documents. This exchange led to further communication, culminating in Aron sharing explicit photographs, including those featuring another woman, as detailed in the government’s sentencing memorandum.
Blackwood expanded her deceptive narrative by inventing additional characters and reaching out to Aron via online burner accounts, including one posing as a fictitious ex-boyfriend and another as a fabricated Vanity Fair reporter who claimed to have knowledge of their messages. She demanded substantial hush money and threatened to expose the photos and messages to the media and AMC’s board. At one point, she even sent Aron the unlisted cell phone numbers of six board directors, suggesting that “Offers are coming in like crazy ppl love a scandal.”
Aron chose not to yield to the blackmail and, instead, reported the situation to the FBI, as attested by prosecutors. While Aron is clearly a victim in this case, his judgment has been called into question on various occasions, potentially placing additional pressure on him from the board and already restive investors.
Aron’s unconventional decisions in recent years have raised eyebrows, from a public interview in 2021 where he appeared to be without pants to AMC’s $28 million investment in a struggling gold miner, a move labeled as “bold diversification” by Aron.
He also ventured into the world of NFTs, offloaded substantial amounts of stock during the meme-stock frenzy, ahead of a substantial 94% decline in the share price over the past two years. Furthermore, a recent dilutive $325 million share sale has alienated even staunch supporters, with the company warning investors of the potential “material adverse impact” caused by negative sentiment among AMC’s retail stockholder base.
AMC Entertainment last traded at $11.00 on NYSE.
Information for this story was found via Semfor and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
