Social media company Trump subpoenaed by feds, stock market regulators

NEW YORK (AP) — Donald Trump’s social media company and some of its employees have received subpoenas from both a federal grand jury and securities regulators, according to a public disclosure Friday, delaying perhaps or even killing a deal promising a cash injection needed to take over Twitter.

Trump Media & Technology Group has received subpoenas from a New York grand jury and the Securities and Exchange Commission, according to a securities filing Friday by Digital World Acquisition Corp. Digital World intends to buy Trump Media, unlocking $1.3 billion for its fledgling business, but the deal is unlikely to close amid two legal probes.

Trump, who is the president of Trump Media, was not among the employees who received subpoenas, according to a statement from Trump Media.

On Monday, Digital World announced that it had received subpoenas from the same grand jury convened by the US Attorney’s Office in Manhattan. Digital World has been under investigation by the SEC for possible violations for months, a development that has weighed on the stock.

Digital World stock closed Friday at $5.78, down 25% in a week. It was over $100 last year after the company announced it had reached a deal to buy the former president’s social media company.

The SEC has investigated whether Digital World broke the rules by having substantial talks about buying Trump’s company from early last year before Digital World sold shares to the public for the first time. in September. A few weeks later, he announced that he would buy the company from Trump.

Digital World is part of a once-popular group of “blank check” companies that go public as empty entities with no operations, only offering investors the promise that they will buy a company in the future. As such, they are permitted to quickly sell shares to the public without the usual regulatory disclosures and delays, but only if they have not already lined up potential acquisition targets.

Trump’s social media offering, called Truth Social, launched in February. He said he fights Big Tech’s limits on speech. Trump was banned from Twitter, Facebook and YouTube last year after the Jan. 6 Capitol riot.

Last year, Trump Media lined up dozens of investors to inject $1 billion into the company, but can’t get the money until the Digital World acquisition is complete. Another $300 million would come from Digital World itself.

Copyright 2022 The Associated Press. All rights reserved.

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