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LetMyPeopleVote

(143,999 posts)
Fri Jul 1, 2022, 07:57 PM Jul 2022

Trump media company subpoenaed in federal criminal probe of SPAC deal

Source: CNBC

Donald Trump’s media company was subpoenaed by a federal grand jury in connection with a criminal probe, according to the company with which the former president’s firm plans to merge.

Digital World Acquisition Corp. said in a filing Friday that Trump Media and Technology Group received a subpoena from the grand jury in Manhattan on Thursday. The Trump company also received a subpoena from the Securities and Exchange Commission regarding a civil probe on Monday, DWAC said.

DWAC also said some current and former TMTG employees have also recently received grand jury subpoenas. Later Friday, TMTG said it would comply with the subpoenas, and that none of them were directed at its chairman, Trump, or CEO, former U.S. Rep. Devin Nunes.

The filing came days after DWAC said the government investigations could delay or even prevent its merger with Trump’s newly formed company, which includes Truth Social, a social media app intended to be an alternative to Twitter.

Neither TMTG nor a spokeswoman for Trump immediately responded to CNBC’s requests for comment.

The Justice Department and the SEC, which regulates the stock market, are investigating the deal between DWAC and Trump Media. By merging with DWAC, which is a kind of shell company called a special purpose acquisition company, or SPAC, Trump’s firm would gain access to potentially billions of dollars on public equities markets.

Read more: https://www.cnbc.com/2022/07/01/trump-media-company-subpoenaed-in-federal-criminal-probe-of-spac-deal.html?__source=sharebar|twitter&par=sharebar

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Trump media company subpoenaed in federal criminal probe of SPAC deal (Original Post) LetMyPeopleVote Jul 2022 OP
TFG's media company was also subpoenaed by the SEC LetMyPeopleVote Jul 2022 #1
Subpoenas point to even more trouble for Trump's media venture LetMyPeopleVote Jul 2022 #2
Donald Trump has a history of bankruptcies and loan defaults. LetMyPeopleVote Jul 2022 #3
Donald Trump left the board of his social media company weeks before federal subpoenas LetMyPeopleVote Jul 2022 #4

LetMyPeopleVote

(143,999 posts)
1. TFG's media company was also subpoenaed by the SEC
Fri Jul 1, 2022, 08:07 PM
Jul 2022

Current and former employees of Trump Media & Technology were subpoenaed but it appears that TFG and Nunes were not subpoenaed


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This is from the SPAC's SEC filing
https://www.sec.gov/Archives/edgar/data/0001849635/000119312522187236/d322382d425.htm

Digital World has been informed that on June 27, 2022 TMTG received a subpoena from the SEC seeking documents relating to, among other things, Digital World and other potential counterparties for a business transaction involving TMTG. Digital World has also been informed that on June 30, 2022, TMTG was served with a subpoena, issued by a federal grand jury sitting in the Southern District of New York, seeking a subset of the same or similar documents demanded in subpoenas to Digital World and its directors. Certain current and former TMTG personnel have also recently received individual grand jury subpoenas.

LetMyPeopleVote

(143,999 posts)
2. Subpoenas point to even more trouble for Trump's media venture
Mon Jul 4, 2022, 06:54 PM
Jul 2022

Please remember that I am a securities attorney and this is interesting to me. Special purpose acquisition corporations are relatively new investment vehicles and take the place of using so called public shells to go public. Public shells are in effect failed public companies that had no assets but had more than 500 shareholders and were in effect reporting companies. People would use public shells for pump and dump deals where they put some assets into the shell and promoted the company to run up the stock price so as to profit by dumping the stock.

SPACs are different in that a shell corporation can raise several hundred million dollars with the promise that the new entity will be buying a real company. A bunch of shady types formed Digital World Acquisition ("DWA&quot and raised $290 million and then entered into a merger agreement to merge with and into Trump Media & Technology ("TMT&quot which is essentially a shell with no revenue and $59,000 of assets on its balance sheet. The result of the merger would be that TFG would have access to a couple of hundred million dollars to pursue his plan to build a media empire. The only asset of the combined company would be a ton of cash and Truth Social.

This was an abuse of the SPAC structure and there were some clear problems. A while back the SEC subpoenaed DWA. Later the DOJ acting through a grand jury subpoenaed DAC and its officers. This week, the DOJ pursuant to a grand jury and the SEC both subpoenaed TMT and certain of its officers (TMT is claiming that neither TFG nor Devon Nunes were subpoenaed).



https://www.msnbc.com/rachel-maddow-show/maddowblog/subpoenas-point-even-trouble-trumps-media-venture-rcna35665

It was last fall when the former president and his team launched the Trump Media & Technology Group, which appeared to have bold, multimedia ambitions: It said it intended to compete with both Twitter and Netflix. To that end, the operation even hired a high-profile CEO: Former House Intelligence Committee Chairman Devin Nunes, despite his lack of media experience, announced he’d resign from Congress to lead the nascent company......

Because the former president has a history of bankruptcies and loan defaults, he couldn’t simply go to a major American financial institution to help bankroll his media venture. So, Trump agreed to merge his operation with a special purpose acquisition company (SPAC), called Digital World Acquisition. As the Times has reported, “To get his deal done, Mr. Trump ventured into an unregulated and sometimes shadowy corner of Wall Street, working with an unlikely cast of characters.”

Indeed, as we discussed late last year, the Republican ended up working with a dubious Chinese operation, all of which apparently drew the interest of investigators at the SEC and the Financial Industry Regulatory Authority (FINRA), which typically investigates things like insider trading.....

To be sure, as Rachel explained on the show last night, this isn’t the only criminal investigation surrounding the Republican, but it is one of the former president’s biggest headaches. As Axios recently reported, “Truth Social’s financial prospects are heavily reliant on investment tied to the merger.”

The more the investigations delay the merger being finalized, the more it’s an open question as to whether Trump’s venture will ever get the capital it’s looking for.

Now both TFG's company is also the subject of SEC and DOJ subpoenas.

This will be fun to watch

LetMyPeopleVote

(143,999 posts)
3. Donald Trump has a history of bankruptcies and loan defaults.
Wed Jul 6, 2022, 09:20 PM
Jul 2022

Use of a SPAC is the only way for TFG to fund this venture




Donald Trump and his operation didn’t need more legal trouble, but his media company was subpoenaed by a federal grand jury anyway. CNBC reported:

Donald Trump’s media company was subpoenaed by a federal grand jury in connection with a criminal probe, according to the company with which the former president’s firm plans to merge. Digital World Acquisition Corp. said in a filing Friday that Trump Media and Technology Group received a subpoena from the grand jury in Manhattan on Thursday. The Trump company also received a subpoena from the Securities and Exchange Commission regarding a civil probe on Monday, DWAC said.


.....Donald Trump and his operation didn’t need more legal trouble, but his media company was subpoenaed by a federal grand jury anyway. CNBC reported:

Donald Trump’s media company was subpoenaed by a federal grand jury in connection with a criminal probe, according to the company with which the former president’s firm plans to merge. Digital World Acquisition Corp. said in a filing Friday that Trump Media and Technology Group received a subpoena from the grand jury in Manhattan on Thursday. The Trump company also received a subpoena from the Securities and Exchange Commission regarding a civil probe on Monday, DWAC said.

LetMyPeopleVote

(143,999 posts)
4. Donald Trump left the board of his social media company weeks before federal subpoenas
Thu Jul 7, 2022, 04:47 PM
Jul 2022

I have been following this story for a while. I never understood how this deal made any sense economically. Digital World Acquistion is a SPAC that nominally raised $1.3 billion but due to redemption rights that amount could go down to $290 million. Trump Media and Technology is a company that is owned by TFG that has a approximately $50,000 in assets on its balance sheet and no real revenue. If this merger had gone through, TFG would have access to between $290 million and $1.3 billion in assets to run a new media empire. TFG had hired Devin Nunes to run the company and NUnes gave up his house seat to go work for TFG.

SPACs are sketchy to start with and this one has a ton of fraud built into it. Both the SEC and the DOJ is subpoenaing both DWA and TMT. That and TFG resigning from the board is good sign that this deal is dead. Poor Devin Nunes is the only left at this company and that makes me smile




https://www.cnbc.com/2022/07/07/trump-left-social-media-company-board-before-federal-subpoenas.html?utm_source=dlvr.it&utm_medium=twitter

Former President Donald Trump left the board of his social media company just weeks before it was issued subpoenas by the Securities and Exchange Commission and a federal grand jury in Manhattan, records show.

Trump, who had served as the chair of Trump Media and Technology Group, was one of six board members removed, according to a June 8 filing with the Florida Department of State’s Division of Corporations. His son Donald Trump Jr. also departed the board, along with Wes Moss, Kashyap Patel, Andrew Northwall and Scott Glabe.

The “Board of Directors” page on Trump Media’s website appeared blank as of Thursday afternoon......

The subpoenas appear to be related to a proposed merger between Trump Media and Technology and Digital World Acquisition Corp. DWAC disclosed the connection with a criminal probe Friday. A week prior, DWAC said the government investigations could delay or even prevent its merger with Trump’s newly formed company, which includes Truth Social, a social media app intended to be an alternative to Twitter.

The Justice Department and the SEC, which regulates the stock market, are investigating the deal between DWAC and Trump Media. By merging with DWAC, which is a kind of shell company called a special purpose acquisition company, or SPAC, Trump’s firm would gain access to potentially billions of dollars on public equities markets.
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