It’s not unusual that business ventures with the name Trump attached to them are subject to federal investigations and settlements, but the inquiry into the former president’s new media company is coming a whole lot sooner than one might imagine. Just two months after the firm chaired by Donald Trump vowing to “stand up to the tyranny of Big Tech” made plans to go public via a SPAC, the holding company involved with Trump Media & Technology Group announced that it is being investigated by the Securities and Exchange Commission.
The company, known as Digital World Acquisition, is a special purpose acquisition company, which is a publicly traded firm that solely exists to merge with a “target” private company to help it go public. (Boring perhaps, but the method has been incredibly popular, if not always successful, this past year.) According to Digital World, the SEC contacted them early last month requesting documents related to board of directors’ meetings; policies related to trading; the identity of some investors; and its communications with Trump Media & Technology Group.
At first glance, the SPAC plan concocted by two former The Apprentice contestants and a banker named Patrick Orlando was a hit, pulling in $300 million upon the initial public offering in September. And while Digital World’s securities filings state that they have not been involved in any “substantive discussions, directly or indirectly” with a target company, the New York Times reported in October that Orlando had been talking about the deal with Trump since March — which could run afoul of securities laws designed to stop backchannel dealings ahead of an IPO. In a letter to SEC Chairman Gary Gensler last month, Senator Elizabeth Warren wrote that Digital World’s potential securities violations ended up “enriching big investors while trapping retail investors in a stock bubble.”
Monday wasn’t all bad news for Trump’s latest company. A week after the firm announced that unidentified investors put in $1 billion, Devin Nunes announced he would join the Trump Media & Technology Group, finally going pro in Trump promotion after spending years in the farm league of Congress doing the very same.