Trump social network deal under federal investigation
Federal prosecutors are scrutinizing a billion-dollar merger between a blank-check company and former President Donald Trump's social media startup, the company revealed in a regulatory filing Monday.
A federal grand jury in New York last week issued subpoenas to Digital World Acquisition Corp., the special purpose acquisition company merging with Trump Media & Technology Group, as well members of Digital World's board of directors.
The grand jury in New York's Southern District is the latest federal investigation that could delay or complicate the merger between the company Trump chairs and Digital World, a special purpose acquisition company. The companies previously indicated they expected the merger to be complete this year, and would provide Trump Media with $1.25 billion in net proceeds, as well a stock market listing.
Digital World revealed in a December 2021 filing that the Securities and Exchange Commission and Financial Industry Regulatory Authority were each probing the deal with Trump Media. In Monday's filing, the company said the grand jury and SEC had subpoenaed similar information "regarding, among other things, Digital World's due diligence regarding (Trump Media)" and related communications.
Trump Media said in a press release Monday that it "will cooperate with-oversight that supports the SEC's important mission of protecting retail investors."
"Every day, our team works tirelessly to sustain Truth Social's rapid growth, onboard new users, and add new features," the company said, referring to the social network it operates. The network launched in February and has centered its brand around Trump and other rightwing figures, such as former Rep. Devin Nunes, the company's CEO. Trump has 3.4 million followers on the site, the most of any account.
A spokesperson for the Justice Department's Southern District declined to comment.
The grand jury also sought information related to Rocket One Capital, a Miami-based investment, according to Digital World's filing. The filing does not describe the information that was demanded, but in a separate filing Monday Digital World said Bruce Garlic, a Rocket One executive, had resigned from Digital World's board. The filing did not say why he resigned.
Representatives of Rocket One did not immediately return calls and emails seeking comment.