Sen. Elizabeth Warren is calling for the Securities and Exchange Commission to investigate the planned deal between former President Trump’s new media company and a special-purpose acquisition company, or SPAC.
She is alleging the tie-up could “run afoul of SEC rules.”
Digital World Acquisition Corp. plans to take Trump Media and Technology Group public, it announced last month, through the SPAC deal.
On Thursday, Warren sent SEC Chair Gary Gensler a letter, calling for him to look at whether Digital World officials and Trump “may have committed securities violations by holding private and undisclosed discussions about the merger as early as May 2021, while omitting this information in U.S. Securities and Exchange Commission (SEC) filing and other public statements.”
SPACs, or special-purpose acquisition companies, are governed by rules that mandate the so-called blank-check companies are not allowed to meet with possible acquisition targets before listing on a public exchange.
But a New York Times article last month suggested Trump was meeting with representatives from DWAC about a possible deal with his incipient social media company as early as March — months before DWAC listed shares on Nasdaq in October.
“The reports about DWAC and Trump Media and Technology Group appear to be a textbook example of a SPAC misleading shareholders and the public about materially important information,” Warren adds in her letter.
A spokesman for the SEC did not immediately respond to request for comment. A Trump spokeswoman didn’t immediately comment and a spokeswoman for Warren did not respond to a request for comment.
DWAC shares were trading at less than $10 each before the company announced its deal with Donald Trump’s media and technology group TMTG last month. They surged to more than $144 after news of the merger broke. Since then, they’ve stabilized around $56 per share.
It’s unclear what, if any, action the SEC will take following Warren’s letter.
Trump Media & Technology Group said last month it plans to roll out a new social network, dubbed TRUTH Social, which is set to launch soon in beta for “invited guests” and come online nationwide in the first three months of 2022.
Its mission is to “create a rival to the liberal media consortium and fight back against the ‘Big Tech’ companies of Silicon Valley, which have used their unilateral power to silence opposing voices in America,” it said.