Trump SPAC deal under investigation by financial regulators

• DWAC disclosed that SEC and FINRA asked for stock trading information weeks ago

• Shares of the blank-check company were down almost 3% at $43.19

The SPAC planning to merge with former U.S. President Donald Trump’s social media company disclosed on Monday that top financial regulators are probing the $1.25 billion deal.

Digital World Acquisition Corp. said that the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) asked for stock trading information weeks ago.

Trump plans to launch a social media platform called “TRUTH Social,” after he was banned from Twitter and Facebook because of his role in incitement of the Jan. 6 Capitol riot.

Shares of the blank-check company were down almost 3% at $43.19 after the news disclosed.

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In the previous week, Trump Media & Technology Group and DWAC had said that $1 billion in committed capital had been agreed for the SPAC from “institutional investors.”

FINRA asked for information regarding the stock trading “that preceded the public announcement of the October 20, 2021 Merger Agreement” shortly after the deal was announced, the SPAC said in a filing.

After the deal was announced, shares of SPAC were trading as high as $175, compared to around $10 before the announcement of the merger.

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In early November, the SEC sent a voluntary information and document request to DWAC seeking information regarding DWAC board meetings, policies about stock trading, the identities of certain investors and details of communications between DWAC and Trump’s social media firm, the filing said.

The filing added that the SEC and FINRA indicated in their requests that there has been no wrongdoing by the company.

Picture Credits: Reuters