The investigation by federal prosecutors and securities regulators into a proposed merger between a cash-rich blank check company and former President Donald J. Trump’s social media company has gotten closer to Mr. Trump’s end of the deal.
Federal prosecutors served grand jury subpoenas on Trump Media & Technology Group and “certain current and former TMTG personnel,” according to a regulatory filing on Friday by Digital World Acquisition, the special purpose acquisition company that has a tentative deal to merge with Trump Media.
Grand jury subpoenas are typically issued in connection with a potential criminal investigation. The filing said the Securities and Exchange Commission also served a subpoena on Trump Media this week.
Just days earlier, Digital World revealed that it, too, had received a grand jury subpoena from federal prosecutors in Manhattan along with similar subpoenas served on its board of directors.
The grand jury subpoenas appear related to earlier S.E.C. subpoenas on Digital World that sought communications concerning potential merger talks with representatives of Trump Media before Digital World’s initial public offering in September.
The regulatory filing on Friday said the grand jury subpoenas served on Trump Media were “seeking a subset of the same or similar documents demanded in subpoenas to Digital World and its directors.”
The expanding investigation threatens to delay the completion of the merger, which would provide Mr. Trump’s company and its social media platform, Truth Social, with up to $1.3 billion in capital, in addition to a stock market listing.
The S.E.C. investigation has focused on whether there were serious discussions between the leadership of Digital World and Trump Media before the special purpose acquisition company, or SPAC, went public in September and, if so, why those talks were not disclosed in regulatory filings. SPACs, which raise money to go public in the hopes of finding a merger candidate, are not supposed to have an acquisition target in mind when they raise money from investors.
Regulators have also requested information about trading activity in securities of Digital World before the merger announcement in October. A few weeks before the merger announcement, there was a big surge in trading of Digital World warrants — a type of security that gives the holder the right to buy shares at a specified price.
Trump Media is based in Sarasota, Fla., and is led by Devin Nunes, the former Republican congressman who became chief executive officer this year. Mr. Trump, who has a licensing deal with the company, is chairman.
In a statement, Trump Media said it “will continue cooperating fully with inquiries into our planned merger and will comply with subpoenas we’ve recently received, none of which were directed at the company’s chairman or C.E.O.”
It is unclear which current and former personnel at Trump Media received subpoenas.
Truth Social, a Twitter-like platform, remains the primary product of the company. Mr. Trump, over the past few months, has become a frequent poster on the platform.
This week, he used the platform repeatedly to criticize the testimony of a former White House aide, Cassidy Hutchinson, before the congressional Jan. 6 committee.
Trump Media has called Truth Social a “free expression” alternative to Twitter, which permanently barred the former president from using its platform after the Jan. 6, 2021, attack on the Capitol.
Maggie Haberman contributed reporting.
Source: NY Times
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