Home Business Wall Street Watchdogs Probe Trump Media Firm Deal

Wall Street Watchdogs Probe Trump Media Firm Deal

Wall Street Watchdogs Probe Trump Media Firm Deal
Source: Reuters

Wall Street watchdogs are looking into Donald Trump’s plan to list his social networking company on the stock exchange.

Digital World Acquisition Corp, which is poised to merge with Trump Media and Technology Group, is being investigated by regulators (TMTG).

The US Securities and Exchange Commission (SEC) demanded records concerning its investors and trading, according to a filing on Monday.

Early next year, TMTG hopes to introduce Truth Social, a social media app.

The SEC also requested details on the link between Digital World and TMTG, according to the document.

The Financial Industry Regulatory Authority (FINRA) is also investigating the deal, according to the report.

According to news outlets, the SEC will not comment on the “presence or nonexistence of a potential probe.”

Last month, Democratic Senator Elizabeth Warren asked the SEC to look into the proposed merger of the two companies for possible securities law breaches.

Digital World is a “blank cheque” corporation or a “special purpose acquisition company.”

Spacs, which became a significant topic in the US stock market at the beginning of this year, are shell corporations formed solely for the goal of merging with a private company and taking it public. They have, however, lost a lot of their luster after several of the firms who merged with them failed to meet their lofty financial goals.

Mr Trump’s company said on Saturday that it had received $1 billion from “a diversified collection of institutional investors,” but did not name them. According to estimates, the social networking company is now worth about $4 billion.

Following the 6 January attack on the US Capitol, the former US president is still banned from Twitter and Facebook.

According to a presentation on his company’s website, Mr Trump had 89 million Twitter followers, 33 million Facebook followers, and 24.5 million Instagram followers at the time he was banned.