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Zenger
Zenger
Politics
Chris Katje

Trump Media SPAC Faces Setbacks As SEC Settles Fraud Charges

Former US President Donald Trump speaks at the Turning Point Action conference as he continues his 2024 presidential campaign on July 15, 2023 in West Palm Beach, Florida. A SPAC merger linked to the media arm of former President Donald Trump continues to face setbacks since being announced in October 2021. PHOTO BY JOE RAEDLE/GETTY IMAGES 

A SPAC merger linked to the media arm of former President Donald Trump continues to face setbacks since being announced in October 2021.

A merger between Donald Trump’s Trump Media & Technology Group and Digital World Acquisition Corporation (NASDAQ: DWAC) has seen several delays in its approval and merger vote date since it was announced.

On Thursday, the U.S. Securities and Exchange Commission (SEC) announced it settled fraud charges against the SPAC related to material misrepresentations made to investors.

The SEC found that Digital World Acquisition Corporation misled investors by failing to disclose that it had previously discussed plans to acquire the Trump-led media company prior to going public.

“DWAC failed to disclose its discussions with TMTG and failed to disclose a material conflict of interest of its CEO and Chairman,” SEC’s Division of Enforcement Director Gurbir S. Grewal said. “In the context of a SPAC — a ‘blank check’ entity without business operations — these disclosure failures are particularly problematic because investors focus on factors such as the SPAC’s management team and potential merger targets when making financial decisions.”

Former US President Donald Trump arrives on stage to speak at the Turning Point Action conference as he continues his 2024 presidential campaign on July 15, 2023 in West Palm Beach, Florida. A merger between Donald Trump’s Trump Media & Technology Group and Digital World Acquisition Corporation (NASDAQ: DWAC) has seen several delays in its approval and merger vote date since it was announced. PHOTO BY JOE RAEDLE/GETTY IMAGES  

The SEC and DWAC reached terms of an $18 million penalty if the merger closes and a cease-and-desist order. All amended S-4s filed by DWAC will include complete accuracy under the terms of the deal.

DWAC previously filed an amended Form S-1 in September 2021 that declared the company and any of its officers had not held discussions with any companies about a merger prior to the SPAC going public.

The SEC found the amended Form S-1 false and misleading.

The latest SEC filing follows several parties related to the SPAC merger between Trump Media & Technology Group and Digital World Acquisition Corporation charged with insider trading.

Produced in association with Benzinga

Edited by Saba Fatima and Asad Ali

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