Though that penalty will cap a long-running investigation, the SPAC’s proposed merger with Trump Media & Technology Group remains stalled. The blank-check company could be forced to liquidate if the merger does not conclude before a Sept. 8 deadline, returning to investors roughly $300 million that Trump’s company has long hoped to unlock.
When Digital World announced its initial public offering in September 2021, the company told investors that neither it nor its executives had participated in any merger discussions with any companies, in line with federal SPAC rules.
But Digital World’s then-chief, the Miami financier Patrick Orlando, had in fact discussed a merger with Trump Media seven months earlier, the SEC said.
The announcement confirms what has been long rumored about the proposed merger, including claims from Will Wilkerson, a Trump Media executive who told the SEC in a whistleblower filing last year that the company had violated securities laws. Wilkerson was fired after speaking with The Washington Post.
Digital World “failed to disclose its discussions with TMTG and failed to disclose a material conflict of interest of its CEO and Chairman,” said Gurbir S. Grewal, the director of the SEC’s Division of Enforcement. “These disclosure failures are particularly problematic because investors focus on factors such as the SPAC’s management team and potential merger targets when making financial decisions.”
Trump and his Republican allies have long accused the SEC of political bias in stalling the merger.
This is a developing story. Please check back for updates.
