In October, Trump announced a new media venture that would “stand up to the tyranny of Big Tech.” That new entity, chaired by the former president, agreed to go public through a merger with Digital World, a Special Purpose Acquisition Company, or SPAC.
Digital World also said Wall Street’s self-regulator, the Financial Industry Regulatory Authority, or FINRA, is looking into trading prior to the deal’s announcement.
Digital World said Monday the SEC request sought documents relating to meetings of its board of directors, policies and procedures related to trading, the identification of banking, telephone and email addresses and the identities of certain investors.
Digital World indicated it has cooperated and stressed, citing the SEC’s request, that the investigation does not mean the SEC has “concluded that anyone violated the law or that the SEC has a negative opinion of DWAC or any person, event or security.”
Neither Digital World nor Trump Media and Technology Group responded to requests for further comment.
Digital World’s shares closed down more than 4% Monday.
In addition to the SEC investigation, Digital World said that in late October and early November it received a request for information from FINRA. The company said FINRA’s request concerned a review of trading prior to the October 20 Trump merger announcement.
“According to FINRA’s request, the inquiry should not be construed as an indication that FINRA has determined that any violations of Nasdaq rules or federal securities laws have occurred, nor as a reflection upon the merits of the securities involved or upon any person who effected transactions in such securities,” Digital World said in the filing.
Despite the regulatory scrutiny and the fact that Trump Media & Technology Group has not actually launched a product, the venture announced Saturday it reached a deal to raise $1 billion upon completion of its SPAC agreement.
Curiously, TMTG did not disclose who the investors committing $1 billion are, other than to say they are a “diverse group” of institutional investors.