US Regulators Watch For Trump And SPAC Social Media Merger, Chat History Is Requested!

JAKARTA - The new social media company, TRUTH, owned by former US President Donald Trump, which is planning to merge with a special purpose acquisition company (SPAC) is being monitored by the country's regulations.

The Securities and Exchange Commission (SEC), as well as other regulators, asked SPAC to provide information about stock trading and communications with Trump's company before the deal was announced.

The investigation carried out by the SEC and the Financial Industry Regulatory Authority (FINRA) is disclosed in an 8-K filing with the SEC by Digital World Acquisition Corp (DWAC), a special-purpose acquisition company on track to merge with Trump Media & Technology Group (TMTG).

The SEC is interested in documents containing communications between SPAC and TMTG, including documents relating to DWAC Board of Directors meetings, policies and procedures relating to trading, banking identification, telephone, email addresses, identification of certain investors, and certain documents and communications between DWAC and TMTG.

FINRA meanwhile, is requesting information on stock trading that precedes the public announcement of the October 20, 2021 Merger Agreement.

The merger decision was initially due to Trump's company planning to launch a social media platform called TRUTH Social, purportedly to compete with Twitter and Facebook, both of which have banned Trump from turning social media into a hotbed of controversial politics.

DWAC has projected Truth Social to reach 40 million subscribers and 81 million total users by 2026.

Citing CNBC International, Tuesday, December 7, further, the SEC's request comes just two days after TMTG and DWAC said SPAC had reached an agreement to raise $1 billion in committed capital from a diverse group of institutional investors, the funds will be received when the merger is complete.

The identities of those investors called PIPE, or private investments in public equity, were not disclosed to the public. Monday's 8-K filing by DWAC detailed PIPE's terms, under which they would acquire shares at an initial convertible price of US$33.60 per share.

If any of the regulators found evidence of inappropriate financial dealings at the start of the SPAC, it could derail the project, leaving the fate of Trump's media company in jeopardy. In fact, SPAC shareholders can withdraw their investment at any time before going public.