Digital World Employee Leaks Information About Truth Social's Initial Share Sale Agreement

JAKARTA - The New York Times recently reported that employees at an investment firm in Miami had learned about a pending merger deal between former US President Donald Trump's social media firm and a blank check entity long before it was announced.

Company officials, Rocket One Capital, spoke at the time about how to profit from the soon-to-be-announced transaction by Trump Media & Technology Group by investing in SPAC (special purpose acquisition company), Digital World Acquisition Corp. In this report the NYT cites two anonymous sources.

Federal prosecutors and regulators are now investigating the merger as unlawful.

Trump Media & Technology Group, creators of social media platform Truth Social, agreed to join Digital World on October 20 and the deal is expected to be finalized in the second half of this year. Trump Media and Rocket One Capital did not immediately respond to the report.

A top Rocket One executive, Bruce Garelick, was on Digital World's board until he stepped down in recent weeks.

In the days before the Trump Media deal went public, there was a spike in trading in a type of security known as a warrant, which entitles investors to buy Digital World shares at a later set price.

Federal prosecutors and regulators are now investigating the merger between Digital World and Trump Media, including the trading frenzy in the SPAC warrants.

Digital World said in a recent regulatory filing that a federal grand jury in Manhattan has issued a subpoena seeking information about Rocket One.

The exact scope of the federal investigation remains unclear. Authorities have not accused anyone of wrongdoing, and representatives of Garelick and others deny doing anything inappropriate.

A lawyer for Rocket One and its founder, Michael Shvartsman, denied that they had any prior information about a planned merger between Digital World and Trump Media. He added that "any statement to the contrary is not true."