Well...hard to believe yet another Trump-backed business is failing...or is it? It would seem that some people just cannot play on a level playing field, they must always attempt to have that insider edge~
Executives for the SPAC tied to struggling Truth Social -- the Donald Trump-centric social media platform -- are facing a September deadline to get SEC approval for their pending merger or they will be forced to return millions to investors.
According to report from the New York Times, two different investigations are tying up the merger between Digital World Acquisition Corp. and Trump Media & Technology Group with $300 million at stake.
As the Times reports, "That deal has been waylaid by two intensifying federal investigations. One is focused on whether preliminary merger discussions between Digital World and Trump Media violated federal securities laws. The other investigation is looking at whether a group of early investors in Digital World — who were brought into the deal by [deal architect Patrick] Orlando — engaged in improper trading."
With a six-month deadline looming, there is concerns by executives from both companies that two federal investigations won't wrap up in time and they will have to refund the money dumped into the company's early investors.
"Executives of Trump Media and some shareholders of Digital World have accused the S.E.C. of trying to run out the clock. In February, officials with Trump Media sent a letter to several Republican congressmen asking them to open an investigation into the S.E.C.’s refusal to approve the deal, accusing regulators of being biased against the former president," the report states. "SPACs are not allowed to hold serious merger discussions before they go public, and if they do, it can violate federal securities laws. Federal authorities are trying to determine if Digital World’s talks with Trump Media were substantive enough that they should have been disclosed before the SPAC sold shares to the public in September 2021."
According to one expert in securities laws, Michael Klausner of Stanford Law School, "If it was clearly prearranged, that was an egregious violation. The S.E.C. has the discretion to stop a merger where the disclosures violate security laws.”
Executives for the SPAC tied to struggling Truth Social -- the Donald Trump-centric social media platform -- are facing a September deadline to get SEC approval for their pending merger or they will be forced to return millions to investors.
According to report from the New York Times, two different investigations are tying up the merger between Digital World Acquisition Corp. and Trump Media & Technology Group with $300 million at stake.
As the Times reports, "That deal has been waylaid by two intensifying federal investigations. One is focused on whether preliminary merger discussions between Digital World and Trump Media violated federal securities laws. The other investigation is looking at whether a group of early investors in Digital World — who were brought into the deal by [deal architect Patrick] Orlando — engaged in improper trading."
With a six-month deadline looming, there is concerns by executives from both companies that two federal investigations won't wrap up in time and they will have to refund the money dumped into the company's early investors.
"Executives of Trump Media and some shareholders of Digital World have accused the S.E.C. of trying to run out the clock. In February, officials with Trump Media sent a letter to several Republican congressmen asking them to open an investigation into the S.E.C.’s refusal to approve the deal, accusing regulators of being biased against the former president," the report states. "SPACs are not allowed to hold serious merger discussions before they go public, and if they do, it can violate federal securities laws. Federal authorities are trying to determine if Digital World’s talks with Trump Media were substantive enough that they should have been disclosed before the SPAC sold shares to the public in September 2021."
According to one expert in securities laws, Michael Klausner of Stanford Law School, "If it was clearly prearranged, that was an egregious violation. The S.E.C. has the discretion to stop a merger where the disclosures violate security laws.”
