There will be litigation https://archive.ph/GBVxc
The SPAC was downsized from $350 million to $293 million and there were discussions between TFG and the promoter of the SPAC during the IPO period
Soon after Mr. Juhan mentioned Trump Media’s agreement with a SPAC, Digital World said that it hoped to raise nearly $350 million from investors. In August, the SPAC disclosed that it had lined up 11 prominent hedge funds and other big investment firms like D.E. Shaw, JPMorgan Chase’s Highbridge Capital and Saba Capital to serve as “anchor,” or main, investors in the initial offering.
“We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target,” Digital World said in prospectuses filed with the S.E.C. in May, July, August and September. Digital World said it would probably focus on companies in the technology or financial services fields.
Securities lawyers said that any conversations between Mr. Orlando’s and Mr. Trump’s teams anytime before the I.P.O. in September might constitute an indirect discussion of a potential deal and so would have needed to be disclosed.
“The prospectus broadly denies that any talks have taken place,” said Usha Rodrigues, a professor at the University of Georgia Law School and one of the leading academic experts on SPACs. “If they were in fact engaged in discussions at the time of the prospectus, that raises questions regarding a potential securities violation.”....
The S.E.C. has begun paying closer attention to the timing of deal negotiations, and so have investors in SPACs.
This summer, investors filed a lawsuit in federal court against a SPAC and the company it acquired. The plaintiffs argued that it was “substantially likely that the transaction was prearranged or at least preconceived,” given how swiftly the SPAC, Netfin Acquisition, had entered into exclusive talks with the target company, Triterras Fintech. They also pointed to the longstanding relationship between executives at the two companies. The suit is pending.
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