Donald Trump just got hit with another blow in his months-long crusade to revive his social media presence.
The tweet-happy ex-president has been trying all year to get his social media handles reinstated after sites like Facebook and Twitter banned his accounts. When those platforms made his ban permanent, Trump decided to launch his own social media safe space called TRUTH Social under the newly-formed Trump Media & Technology Group Corporation. (Obviously, he’s its chairman.) Recently, Trump announced that his new venture would be going public, merging with Digital World Acquisition Corp., a Special Purpose Acquisition Company (SPAC), in a billion-dollar deal he said would help America “fight back against the tyranny of Big Tech.”
The only problem? As of Monday, the whole deal is under investigation by multiple Wall Street regulators for possibly breaking the law. (Is anyone surprised?)
Earlier today, Digital World Acquisition Corp. filed papers saying it received a document and information request from the Securities and Exchange Commission early last month that was specifically focused on communications between the group and Trump’s company. DWA Corp. also said that the Financial Industry Regulatory Authority is investigating trading that might have happened before the official deal was announced. Of course, targeting a merger before you’ve raised your capital is a big no-no for SPACs, which are also known as “blank-check companies.” Normally, SPACs collect investors and sell shares to raise money that goes into a trust account. From there, the investors in charge of the SPAC decide which opportunities and companies to invest in.
According to a Washington Post report, DWA Corp. “repeatedly told shareholders that it had not held substantive talks with a target company” despite Trump publicly discussing the merger possibly as early as March of this year. After Trump officially announced the deal in October, DWA Corp.’s rose nearly 1,657% though current filings don’t show how much, if any, income the company generates. If the SEC finds evidence that DWA Corp. and Trump planned the merger before investors were told of it, it could spell legal trouble for the former president and it would most definitely put his dream of hosting his own social media app on hold.
Naturally, many are noting how something smells a bit fishy about all of this.
The Trump SPAC is starting to look like yet one more fundraising scam by a loser turned conspiracy theorist who uses getting booted off Twitter as a way to gain sympathy and raise cash.
The SEC and other regulators are investigating.
It's about time.https://t.co/oy21THqtMg— Richard W. Painter (@RWPUSA) December 6, 2021
https://twitter.com/WUTangKids/status/1467951670374109185
https://twitter.com/rexzane2/status/1467946968953475074
Nobody is above the law—and there may have been serious violations of securities laws during the proposed merger of Digital World Acquisition Corp & Trump’s media company. I'm glad @SECGov and @FINRA are investigating.https://t.co/0lAhtFTdji
— Elizabeth Warren (@SenWarren) December 6, 2021
(Via Washington Post)