{"id":39147,"date":"2023-07-22T14:23:47","date_gmt":"2023-07-22T18:23:47","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/spac-that-plans-to-merge-with-trump-media-settles-sec-charges-of-fraud\/"},"modified":"2023-07-22T14:23:49","modified_gmt":"2023-07-22T18:23:49","slug":"spac-that-plans-to-merge-with-trump-media-settles-sec-charges-of-fraud","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=39147","title":{"rendered":"SPAC that plans to merge with Trump Media settles SEC charges of fraud"},"content":{"rendered":"
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\u00a9 Reuters. FILE PHOTO: The U.S. Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington, June 24, 2011. REUTERS\/Jonathan Ernst\/File Photo<\/span>
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WASHINGTON (Reuters) – A special purpose acquisition firm that is set to merge with former U.S. President Donald Trump’s media company settled regulatory charges that it had made “material misrepresentations” to investors.<\/p>\n

The U.S. Securities and Exchange Commission (SEC) said on Thursday that Digital World Acquisition Corporation, which was found to have violated antifraud provisions of federal securities laws, agreed to a cease-and-desist order and to pay an $18 million penalty if it closes the merger.<\/p>\n

DWAC’s shares surged about 24% after the bell on hopes the merger, announced in October 2021, could go forward after the fine.<\/p>\n

The SEC said DWAC misled investors by failing to disclose in filings that it had formulated a plan to acquire Trump Media & Technology Group Corp and was pursuing the acquisition before DWAC’s initial public offering. <\/p>\n

DWAC did not immediately respond to an emailed request for comment. <\/p>\n

SPACs are listed shell companies that raise cash to acquire and take public a private company, allowing targets to sidestep the stricter regulatory checks of an IPO.<\/p>\n

The SEC cracked down on SPACs after a frenzy of deals in 2020 and early 2021 sparked concerns that some investors were getting a raw deal. In 2022 the agency proposed new SPAC regulations to boost disclosures and rein in lofty revenue projections. <\/p>\n

Gurbir Grewal, director of the SEC’s division of enforcement, said DWAC also failed to disclose “a material conflict of interest of its CEO and chairman.”<\/p>\n

If the deal closes, Trump Media would gain access to more than $1 billion in much-needed cash from DWAC’s institutional investors. According to a Feb. 2, 2021 services agreement, Trump controls 90% of Trump Media.<\/p>\n

The company’s platform, Truth Social, has struggled to show strong growth in the number of users since its February 2022 launch. <\/p>\n

Trump had 5.72 million followers on Truth Social as of July 20, compared with the more than 88 million followers he had on Twitter when the platform permanently suspended him. <\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a9 Reuters. FILE PHOTO: The U.S. Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington, June 24, 2011. REUTERS\/Jonathan Ernst\/File Photo WASHINGTON (Reuters) – A special purpose acquisition firm that is set to merge with former U.S. President Donald Trump’s media company settled regulatory charges that it had made […]<\/p>\n","protected":false},"author":1,"featured_media":1983,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[1],"tags":[83],"class_list":["post-39147","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-uncategorized","tag-featured","post_format-post-format-video"],"yoast_head":"\nSPAC that plans to merge with Trump Media settles SEC charges of fraud | iFintechWorld<\/title>\n<meta name=\"description\" content=\"\u00a9 Reuters. 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