SEC Launches Investigation Into Donald Trump’s Media and Technology Firm, SPAC Partner
The U.S. Securities and Exchange Commission is seeking, among other details, information on the identity of certain investors in the company that plans to merge with Donald Trump’s recently established social network and media outfit as part of a “preliminary” investigation, according to financial filings.
The disclosure of the SEC probe comes after the October announcement that the Trump Media & Technology Group — which is prepping a social media network called “Truth Social” and a subscription-streaming service stocked with “non-woke” programming — plans to become a publicly traded entity through a merger with Digital World Acquisition Corp., a special purpose acquisition company (SPAC).
In early November 2021, Digital World Acquisition received “a voluntary information and document request from the SEC which sought, inter alia, documents relating to meetings of DWAC’s Board of Directors, policies and procedures relating to trading, the identification of banking, telephone, and email addresses, the identities of certain investors, and certain documents and communications between DWAC and TMTG,” according to SEC filings released Dec. 6.
“According to the SEC’s request, the investigation does not mean that the SEC has concluded that anyone violated the law or that the SEC has a negative opinion of DWAC or any person, event, or security,” the filings state.
In addition, DWAC received a request for information from the private Financial Industry Regulatory Authority (FINRA) involving a review of trading that preceded the announcement of merger agreement with Trump’s media company. According to FINRA’s request, “the inquiry should not be construed as an indication that FINRA has determined that any violations of Nasdaq rules or federal securities laws have occurred, nor as a reflection upon the merits of the securities involved or upon any person who effected transactions in such securities,” per DWAC’s filings.
On Saturday, Dec. 4, DWAC and TMTG announced that Digital World Acquisition has secured deals for $1 billion in committed capital — to be received when the merger with Trump Media & Technology Group is completed — from “a diverse group of institutional investors,” which it it did not identify. The latest funding transaction will provide estimated proceeds of approximately $1.25 billion (after deducting estimated deal expenses) for the combined DWAC-TMTG entity, according to the companies.
“$1 billion sends an important message to Big Tech that censorship and political discrimination must end,” Trump, identified as chairman of TMTG, said in a statement. “America is ready for Truth Social, a platform that will not discriminate on the basis of political ideology. As our balance sheet expands, TMTG will be in a stronger position to fight back against the tyranny of Big Tech.”
Trump is planning to launch his own social network after the twice-impeached former U.S. president was kicked off or suspended from all major internet platforms over his role in the Jan. 6, 2021, deadly attack on the U.S. Capitol. This summer, Trump sued Facebook, Twitter and Google (and their CEOs) alleging they violated his First Amendment rights, despite the fact that the Constitution’s free-speech guarantees do not govern private companies.
Trump Media & Technology Group has said it will launch the Truth Social app in beta on an invitation-only basis in November. The company expects a public rollout in the first quarter of 2022. The Trump subscription VOD service is to be called TMTG Plus, led by Scott St. John, a former executive producer of shows including “Deal or No Deal” and “America’s Got Talent.” It has not announced pricing or an expected launch date. The SVOD service will include entertainment programming as well as “news, podcasts and more.”