Trump SPAC Digital World drops after disclosing new subpoena related to SEC inquiry

[LetMyPeopleVote]

SPACs are sketchy to start with and the SEC has begun looking at these vehicles. The TFG SPAC is even more sketchy than normal . This will be fun to watch

Link to tweet

https://seekingalpha.com/news/3848008-trump-spac-digital-word-drops-after-disclosing-new-subpoena-related-to-sec-inquiry

Trump SPAC Digital World Acquisition (NASDAQ WAC), which is taking Trump's social media company and app Truth Social public, fell 9.2% in regular trading Monday after disclosing that the SEC is expanding a previously disclosed probe of the company.

The SEC recently issued a new subpoena that seeks additional documents and information in regards to the combination of Trump Media & Technology Group and DWAC, according to an 8-K filing from Friday. The "order of examination" may delay the effectiveness of the registration statement, which could "materially" delay the business combination.

The newest subpoena comes after DWAC in early December disclosed it received voluntary information and document request from the SEC, which sought documents relating to meetings of DWAC’s board of directors, policies and procedures relating to its interactions with TMTG. DWAC disclosed in its most recent 10-Q filing in May that it had received a subpoena in relation to the probe on the business combination.

The disclosure about the regulatory probes came after Sen. Elizabeth Warren (D-MA) sent a letter to SEC Chairman Gary Gensler requesting that the agency investigate the transaction.

[LetMyPeopleVote]

1. SEC issued order of examination and further subpoena seeking additional info

Link to tweet

Link to tweet

[Wounded Bear]

2. #ETTD - the next fiasco...nt

[SunSeeker]

3. Geez, every time you lift a corner in Trump World you find dirt.

All they do is crime.

[LetMyPeopleVote]

4. I pulled the disclosure from the SEC database

This is from Digital World Acquisition's latest SEC filing https://www.sec.gov/Archives/edgar/data/1849635/000119312522172206/d355466d425.htm

Item 8.01.
Other Events.

As previously disclosed in Digital World’s quarterly report on Form 10-Q for the period ended March 31, 2022 and other filings with the SEC, Digital World received a document request and subpoena from the SEC seeking various documents and information regarding, among other things, meetings of Digital World board of directors; communications with and the evaluation of potential targets, including TMTG; communications relating to TMTG; agreements with and payments made to certain advisors; investors, including investor meetings and agreements; the appointment of certain of Digital World’s officers and directors; policies and procedures relating to trading; and documents sufficient to identify banking, telephone, and email addresses. The SEC also recently issued an order of examination pursuant to Section 8(e) of the Securities Act, with respect to the Registration Statement relating to the Business Combination, and a further subpoena in support thereof. This subpoena seeks additional documents and information with respect to, among other things, communications regarding and due diligence of potential targets other than TMTG, relationships between and among Digital World (and/or certain of Digital World’s officers and directors) and other entities (including ARC Global Investments II LLC (the “Sponsor”) and certain advisors, including Digital World’s underwriter and financial advisor in its initial public offering), the holders of ownership interests in the Sponsor, certain elements of the transaction history for equity in the Sponsor, and certain forward-looking information about TMTG referenced in the Registration Statement. Any resolution of the investigation could result in the imposition of significant penalties, injunctions, prohibitions on the conduct of Digital World’s business, damage to its reputation and other sanctions against Digital World. In addition, the Section 8(e) order of examination of the Registration Statement can be expected to delay effectiveness of the Registration Statement, which could materially delay, materially impede, or prevent the consummation of the Business Combination.

[Karadeniz]

5. Thanks to Sen Elizabeth Warren!!!!!

[LetMyPeopleVote]

6. Government expands investigation into Trump's social network deal

This is a serious investigation

Link to tweet

https://www.axios.com/2022/06/13/government-expands-investigation-trump-social-network-deal

Federal securities regulators have expanded their investigation into the planned merger between a blank check acquisition company and former President Trump's social media business, known as Truth Social, according to a Monday morning filing with the SEC.

Why it matters: Truth Social's financial prospects are heavily reliant on investment tied to the merger, which may never come to pass.

Backstory: The Securities and Exchange Commission is investigating communications between the blank check company, called Digital World Acquisition Corp., and Trump. Of particular interest would be if the two sides negotiated prior to DWAC going public, which would have been illegal.

What's new: DWAC previously disclosed that it was under investigation, but on Monday said that regulators are seeking "additional documents and information."

This includes communications regarding DWAC's due diligence of companies other than Trump's, if it occurred, relationships between DWAC and other entities (including its IPO underwriter E.F. Hutton), certain forward-looking statements and "certain elements of the transaction history for equity."