Efforts by former President Donald Trump to start a new media company are drawing scrutiny from federal investigators, according to New York Times business investigations correspondent David Enrich.
"Donald Trump’s new social media company and its special purpose acquisition company partner say the partner has agreements for $1 billion in capital from institutional investors. The former president launched his new company, Trump Media & Technology Group (TMTG) in October. He unveiled plans for a new messaging app called "Truth Social" to rival Twitter and the other social media platforms that banned him following the Jan. 6 insurrection at the U.S. Capitol," the Associated Press reported Sunday.
Trump is hoping his effort becomes a publicly listed company via a merger with Digital World Acquisition Corp (DWAC).
"The institutional investors were not identified in a press release issued Saturday by Trump Media and Digital World," the AP noted. "The money would come from "a diverse group" of investors after the two companies are combined, it said."
That financing deal is now under investigation, Enrich reported Monday.
"Securities regulators have opened investigations into the planned merger of a nascent social media company backed by former President Donald J. Trump with a so-called blank-check company that raised nearly $300 million in an initial public offering in September," he reported. "The investigations by the Securities and Exchange Commission and the Financial Industry Regulatory Authority were disclosed Monday in a regulatory filing by Digital World Acquisition Corporation, the special purpose acquisition company that intends to merge with Trump Media Technology Group."
Digital World said it was cooperating with the investigation.
"Shares of Digital World were trading 1 percent lower following the announcement, at about $44.33 a share," he noted.
Here's the story we wrote last month about how the 'blank check' company that is partnering with Trump Media may have violated securities laws. @MattGoldstein26 @LaurenSHirschhttps://www.nytimes.com/2021/10/29/business/trump-spac-digital-world.html\u00a0\u2026— David Enrich (@David Enrich) 1638802034
More to come.https://www.nytimes.com/2021/12/06/business/trump-media-spac-investigation.html\u00a0\u2026— David Enrich (@David Enrich) 1638804340