Trump’s Media Company Deal Investigated by Securities Regulators


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.

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.

Both regulators are looking for information regarding the trading in shares of Digital World. The S.E.C. is also looking into “documents and communications” between Digital World and Trump Media.

Digital World said it was cooperating with the requests for information and “the investigation does not mean that the S.E.C. has concluded that anyone violated the law or that the S.E.C. has a negative opinion of D.W.A.C. or any person, event, or security.”

The investigation, which Digital World said began in early November, comes after The New York Times reported that the chief executive of Digital World, Patrick Orlando, had talks with representatives of Trump Media as far back as March about doing a deal.

Digital World was established as a special purpose acquisition company — an entity that raises money through an I.P.O. and then seeks a company to acquire. When SPACs go public, they are not supposed to have engaged in merger talks without disclosing that to investors.

Digital World disclosed the regulatory investigations in a filing announcing that institutional investors had committed to providing an additional $1 billion to finance the merger in exchange for deeply discounted shares.

The filing said that FINRA asked Digital World to provide information about trading activity before the Oct. 21 announcement of the planned merger with Trump Media. The S.E.C., according to the company, has asked for documents including those relating to meetings of Digital World’s board and “certain documents and communications between D.W.A.C. and T.M.T.G.”

Shares of Digital World were trading 1 percent lower following the announcement, at about $44.33 a share.



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