by the feds and stock regulators
NEW YORK – Donald Trump’s social media firm and employees were subpoenaed by a federal grand jury and securities regulators according to a Friday public disclosure. This could have delayed or killed a deal that promised a cash injection to support Twitter.
Trump Media & Technology Group was subpoenaed by a New York grand jury and the Securities and Exchange Commission. According to a Securities document, Digital World Acquisition Corp. filed on Friday. Digital World plans to purchase Trump Media and release $1.3 billion to its fledgling business. However, the deal will not be completed during two legal investigations.
According to a Trump Media statement,
Trump is not one of the subpoenaed employees.
Digital World reported Monday that it received subpoenas for the same grand jury convened at the Manhattan U.S. Attorney’s Office. Digital World is under scrutiny by the SEC over possible violations since months. This has had a negative impact on its stock price.
Digital World closed Friday at $5. 78, fell 25% within a week. After the announcement that it was buying the social media company of the ex-president, the stock had reached $100.
The SEC is investigating whether Digital World violated rules. It had substantial discussions about purchasing Trump’s company in the early part of last year, before Digital World released stock to the general public. It announced that it was buying Trump’s business just weeks after.
Digital World was once a popular group of empty-check companies. These are corporate entities that have no operational activities and go public to offer investors the chance of buying a future business. They are permitted to quickly sell stock without any regulatory delays and disclosures, provided they don’t have potential acquisition targets.
Trump launched Truth Social in February as a social media platform. According to it, they are fighting Big Tech’s speech restrictions. After the Jan. 6, Capitol Riot, Trump was expelled from Twitter and Facebook as well as YouTube.
Trump Media gathered dozens of investors last year to invest $1 billion in the company. However, the money is not available until Digital World’s acquisition. Digital World would provide an additional $300million.