The investigation by federal prosecutors and securities regulators into a proposed merger between a cash-rich blank check company and former President Donald J. Trump’s social media company has come closer to closing the deal due to Mr. Trump.
Federal prosecutors filed a grand jury subpoena against Trump Media & Technology Group and “certain current and former TMTG personnel,” according to a regulatory filing Friday by Digital World Acquisition, the special-purpose acquisition company that has a tentative deal to to merge with Trump Media.
Grand Jury subpoenas are usually issued in connection with a potential criminal investigation. The filing said the Securities and Exchange Commission also subpoenaed Trump Media this week.
Just days earlier, Digital World revealed that it had also received a grand jury subpoena from federal prosecutors in Manhattan, along with similar subpoenas filed on the board of directors.
The grand jury subpoenas appear to be related to previous SEC subpoenas on Digital World seeking communication about potential merger talks with Trump Media representatives ahead of Digital World’s IPO in September.
The regulatory filing on Friday said the grand jury subpoenas served on Trump Media were “looking for a subset of the same or similar documents demanded in subpoenas against Digital World and its executives.”
The expanding investigation threatens to delay the completion of the merger, which would bring Mr Trump’s company and his social media platform Truth Social up to $1.3 billion in capital, in addition to going public.
The SEC investigation focused on whether there were serious discussions between the Digital World leadership and Trump Media before the special-purpose company, or SPAC, went public in September and, if so, why those talks were not disclosed. in legal records. SPACs, who are raising money to go public in hopes of finding a merger candidate, should not have an acquisition target in mind when raising money from investors.
Regulators have also asked for information about Digital World’s securities trading activity ahead of the merger announcement in October. A few weeks before the announcement of the merger, there was a major surge in trading of Digital World warrants – a type of security that gives the holder the right to buy shares at a specified price.
Based in Sarasota, Florida, Trump Media is headed by Devin Nunes, the former Republican congressman who became chief executive officer this year. Mr. Trump, who has a licensing agreement with the company, is chairman.
In a statement, Trump Media said it “will continue to cooperate fully with investigations into our planned merger and comply with subpoenas we recently received, none of which were addressed to the company’s chairman or CEO.”
It is unclear which current and former Trump Media employees have received subpoenas.
Truth Social, a Twitter-like platform, remains the company’s primary product. Mr Trump has become a frequent poster on the platform in recent months.
This week, he used the platform repeatedly to criticize the testimony of former White House aide Cassidy Hutchinson before the Jan. 6 congressional committee.
Trump Media has called Truth Social a “free speech” alternative to Twitter, which permanently banned the former president from using his platform after the January 6, 2021 attack on the Capitol.
Maggie Haberman reporting contributed.
