SEC expands investigation into Donald Trump’s Truth Social

The government has expanded its inquiry into the proposed merger of Donald Trump’s Truth Social and the SPAC planning to bring it public.

Digital World Acquisition Corp. (DWAC), in a filing with the Securities and Exchange Commission, said securities regulators are seeking additional documents and information about the proposed merger. Specifically, authorities are interested in “communications regarding and due diligence of potential targets other than [Trump’s company].”

The investigation into the merger was previously announced, but this is the latest sign that authorities are stepping up their examination. The focus of the review seems to be on whether the two sides negotiated before DWAC went public, which would be illegal.

DWAC shares surged last October when news broke that the special purpose acquisition company would be bringing Truth Social into public markets, gaining more than 400% in one day. DWAC began trading in September.

“Any resolution of the investigation could result in the imposition of significant penalties, injunctions, prohibitions on the conduct of Digital World’s business, damage to its reputation, and other sanctions against Digital World,” the company said in the filing.

Trump’s deal with DWAC gives him virtually unlimited power at the company. A previous filing noted that no personal or political conduct could be considered terms of a breach of the agreement, even if it was “dishonest, illegal, immoral, or unethical.”. Trump will also have the power to elect who sits on the board of directors and can potentially block matters that would normally require stockholder approval, including the acquisition of the company.

Trump currently has 3.25 million followers on the Twitter-like site.

This story was originally featured on Fortune.com

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