Business partners of former President Donald Trump’s social media start-up divulged this week that their business is facing additional scrutiny from federal investigators but the business remains committed to working with Mr. Trump’s team.
Digital World Acquisition Corp., a special purpose acquisition company, has a merger agreement with the Trump Media & Technology Group, the team behind Mr. Trump’s Truth Social platform.
The U.S. Securities and Exchange Commission recently requested more information from Digital World, involving communications with people outside of TMTG and information on Digital World’s financial advisor, according to a regulatory filing from Digital World made public this week.
“Any resolution of the investigation could result in the imposition of significant penalties, injunctions, prohibitions on the conduct of Digital World’s business, damage to its reputation and other sanctions against Digital World,” said Digital World in a filing with the SEC.
The filing earlier this week also said the SEC’s order “could materially delay, materially impede, or prevent the consummation of the Business Combination.”
Digital World appeared to walk back any implication that its merger with TMTG was on hold in a statement on Wednesday.
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“The Digital World Acquisition Corp. (“Digital World”) team has been tirelessly working towards consummating its proposed business combination (the “Business Combination”) with Trump Media & Technology Group Corp. (“TMTG”), and to afford Digital World stockholders, both large and small, the opportunity to participate in the process of the Business Combination,” Digital World said in a new filing made public on Wednesday.
Digital World also said it appreciated that the SEC works to protect investors and that Digital World was working with the SEC to provide it with the information it needs to conduct its investigation.
The SEC has previously declined to comment on the existence or nonexistence of any investigation when questioned about a federal probe of Digital World.
TMTG did not immediately comment on Digital World’s new disclosures.
Digital World’s stock rose little more than 10% during trading on Wednesday morning but remained down more than 31% over the previous five days, according to the Motley Fool financial advice outlet.