US financial regulators probe Donald Trump’s social media firm over SPAC deal

Federal investigators at US Securities and Exchange Commission (SEC) are investigating former President Donald Trump’s media company Trump Media & Technology Group Corp. (TMTG) that felicitated his return to Wall Street after a merger with Delaware corporation and a wholly-owned subsidiary of DWAC Digital World Acquisition Corp., dated October 20, 2021. The two firms entered into subscription agreements in committed capital to be received upon consummation of their business combination (the PIPE) from a diverse group of institutional investors, according to AP. 

Earlier this month the US Financial Industry Regulatory Authority (FINRA) sent Digital World Acquisition Corporation "preliminary, fact-finding inquiries" in connection with the special purpose acquisition company's plans to merge with Trump Media & Technology Group, a security filing disclosed on Monday. The legal trouble mounted after the blank-cheque company and Trump’s start-up received inquiries from SEC and FINRA following their announcement of a $1 billion “PIPE” investment in committed capital to fund business. 

Ex-US President Donald Trump, Chairman of TMTG, had stated, “$1 billion sends an important message to Big Tech that censorship and political discrimination must end. America is ready for TRUTH Social, a platform that will not discriminate on the basis of political ideology.” 

US regulators seeking information on trading and dealings of Trump's firm 

US regulators are now seeking information on trading and dealings as the US Securities and Exchange Commission in November requested documents from Trump’s media firm about Digital World and Trump Media and Technology Group’s trading policies, investors’ contact details and communications, the filing by SPAC revealed. US-based broker-dealer watchdog FINRA also demanded information on trading just ahead of the official merger announcement, according to several reports. 

Securities and Exchange Commission is probing two of the most notable SPAC deals that surged the shares almost 800% on October 20 before the deals were announced, data compiled by Bloomberg and a release from Donald Trump, suggests. Trump’s media company that includes his own social networking site Truth Social, a podcast unit, and a streaming business, stated that this month it had raised $1billion via unidentified investors. The company also unveiled projections as it claimed that by 2026 it would generate revenue of over $3.7 billion, while Trump projected that it will reach 40 million subscribers by 2026.