An investigation by federal prosecutors and securities regulators into a proposed merger between the cash-rich blank check company and former President Donald J. Trump’s social media company has drawn closer with Mr. Trump’s end of the deal.
Federal prosecutors have subpoenaed Trump Media and Technology Group and “certain current and former TMTG employees,” according to a regulatory filing Friday by Digital World Acquisition, the special-purpose buyout firm that reached a preliminary agreement to merge with Trump Media.
Grand jury subpoenas are usually issued in connection with a potential criminal investigation. The applied The Securities and Exchange Commission also issued a subpoena to Trump Media this week.
A few days ago, Digital World he also found that he had received a grand jury subpoena from federal prosecutors in Manhattan and similar subpoenas serving on the board.
The grand jury subpoenas appear to be related to earlier SEC subpoenas on Digital World, which sought contact with representatives of Trump Media regarding potential merger talks ahead of Digital World’s initial public offering in September.
A regulatory filing on Friday said the grand jury subpoenas served on Trump Media “seek some of the same or similar documents requested in the subpoenas against Digital World and its directors.”
The expanding investigation threatens to delay the completion of the merger, which Mr. Prof. Trump’s company and his social media platform, Truth Social, are worth up to $1.3 billion, in addition to listing on the stock market.
The SEC investigation Before the special purpose acquisition company, or SPAC, went public in September, Digital World focused on whether there were serious discussions between management and Trump Media, and if so, why. those negotiations have not been disclosed in regulatory documents. SPACs raising money to go public in the hope of finding a merger candidate should not consider an acquisition target when raising money from investors.
Prior to the merger announcement in October, regulators requested information on trading activity in Digital World’s securities. There a few weeks before the merger announcement there was a huge increase in trade of Digital World warrants — a type of security that gives the holder the right to buy shares at a certain price.
Trump Media is based in Sarasota, Florida and is run by Devin Nunes, a former Republican congressman who became CEO this year. Mr. Trump, who has a license agreement with the company, is the chairman.
In a statement, Trump Media said it “will continue to cooperate fully with inquiries regarding our proposed merger and comply with the subpoenas we recently received, none of which were directed at the company’s chairman or CEO.”
It is not known which current or former employees of Trump Media have received subpoenas.
Truth Social, a Twitter-like platform, remains the company’s flagship product. Mr. Trump has become a frequent poster on the platform in the past few months.
This week, he repeatedly used the platform to criticize the former White House aide’s testimony. Cassidy Hutchinson, January before Congress. 6 committees
Trump Media has called Truth Social a “free speech” alternative to Twitter, which permanently banned the former president from using its platform after January. 6, 2021, Attack on the Capitol.
Maggie Haberman contributed to the report.
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