Former President Donald Trump’s return to Wall Street’s facilitator unveiled Monday that they are under investigation by two federal regulators.
Through an affiliation with a Special Purpose Acquisition Company [SPAC] Digital World, chaired by Trump, the new entity was granted to go public. It would “stand up to the tyranny of Big Tech” announced Trump about this new media venture late October.
Digital World Acquisition Corp. announced that it received a document and information request from the Securities and Exchange Commission [SEC] early November, in a filing Monday. Furthermore, the SEC request solicited communications between Trump Media & Technology Group and Digital World.
Prior to the deal’s announcement, the Financial Industry Regulatory Authority, Wall Street’s self-regulator, is looking into trading, added Digital World in their statement.
Mere days after the deal’s announcement, shares of Digital World skyrocketed to approximately 1,657%. Despite little to no exposure to details of the venture, the company attained meme stock status almost immediately. If any, the firm did not disclose how much revenue they generate.
The deal drew critical observation quickly. Trump and Digital World started discussing a merger much earlier than the publicity of the SPAC company and before such information was revealed to investors.
US Senator Elizabeth Warren of Massachusetts convoked for SEC to investigate if any laws were broken by Digital World as the blank-check company constantly told its stockholders that it had not held essential discussions with a target company. SPACs are supposed to raise money from the public before they have merger targets arranged.
“Nobody is above the law—and there may have been serious violations of securities laws during the proposed merger of Digital World Acquisition Corp & Trump’s media company,” said Warren in a tweet Monday. She even added that she is “glad” that the SEC and FINRA are investigating.
SEC’s request included documents involving telephone, e-mail addresses, and identities of certain investors, policies, and procedures related to trading, the identification of banking, and meetings of its board of directors, according to Digital World.
Digital World specified that it has given its cooperation and is stressed, following the SEC’s request and that the investigation does not necessarily mean that the SEC has “concluded that anyone violated the law or that the SEC has a negative opinion of DWAC or any person, event or security.”
The two companies in question have not responded to any demand for further comment about the matter at hand.