Saturday, July 20, 2024

Trump Media has been summoned for a federal investigation into the Truth Social deal.


An investigation by federal prosecutors and securities regulators into the proposed merger between a cash-rich blank check company and former President Donald J. Trump’s social media company is nearing the end of the Trump deal.

Federal prosecutors have filed grand jury subpoenas regarding Trump Media and Technology Group and “certain current and former TMTG employees,” according to a regulatory filing Friday by Digital World Acquisition, a special-purpose acquisition company that has an initial deal to merge with Trump Media.

Subpoenas are usually issued to a grand jury in connection with a potential criminal investigation. The said deposit The Securities and Exchange Commission also filed a subpoena regarding Trump Media this week.

Just days ago, the digital world She revealed that she, too, had received a grand jury subpoena from federal prosecutors in Manhattan along with similar subpoenas served on her board.

The grand jury subpoenas appear to be linked to earlier SEC subpoenas on Digital World that sought to communicate potential merger talks with Trump Media representatives ahead of Digital World’s initial public offering in September.

The regulatory filing said Friday that the grand jury subpoenas filed with Trump Media were “pursuing a subset of the same or similar documents requested in the subpoenas to Digital World and its directors.”

The expanded investigation threatens to delay completion of the merger, which would provide Trump’s company and its social media platform, Truth Social, up to $1.3 billion in capital, as well as a stock market listing.

The SEC . investigation Focus on whether there were serious discussions between the leadership of Digital World and Trump Media before the Special Purpose Acquisition Corporation, or SPAC, went public in September, and if so, why These conversations were not disclosed in regulatory filings. SPACs, which raise money for an IPO in hopes of finding a candidate for a merger, are not supposed to have an acquisition objective in mind when they raise money from investors.

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Regulators also requested information about Digital World’s stock trading activity before the merger was announced in October. A few weeks before the announcement of the merger there It was a big boom in trading Digital World Collateral – a type of security that gives the owner the right to buy shares at a specified price.

Trump Media is headquartered in Sarasota, Florida, and is led by Devin Nunes, the former Republican congressman who became CEO this year. Mr. Trump, who has a licensing deal with the company, is the chairman of the board.

In a statement, Trump Media said it would “continue to cooperate fully with inquiries about our planned merger and will comply with recent subpoenas, none of which have been directed at the company’s Chairman or CEO.”

It is unclear which of the current and former Trump Media employees have received subpoenas.

Truth Social, a Twitter-like platform, remains the company’s core product. Mr. Trump has, over the past few months, become a frequent poster on the podium.

This week, he has repeatedly used the platform to criticize the testimony of a former White House aide, Cassidy Hutchinsonbefore a congressional committee on January 6.

Trump’s media company called Trueth Social an alternative to Twitter’s “freedom of speech,” which permanently banned the former president from using its platform after the January 6, 2021 attack on the Capitol.

Maggie Habermann Contribute to the preparation of reports.