Current:Home > StocksSEC charges Digital World SPAC, formed to buy Truth Social, with misleading investors-Angel Dreamer Wealth Society D1 Reviews & Insights
SEC charges Digital World SPAC, formed to buy Truth Social, with misleading investors
View Date:2024-12-23 18:59:38
The Securities and Exchange Commission on Thursday charged a so-called "blank check" acquisition company formed to merge with former President Donald Trump's social media company with fraud.
In announcing a settlement with Digital World Acquisition Corporation, which is listed on the Nasdaq exchange, the SEC said the company misled investors and securities regulators by failing to disclose that it was planning to buy Trump Media & Technology Group before DWAC went public in 2021.
Digital World is a special purpose acquisition company, or SPAC, a shell company that is created to take a private business public without conducting an initial public offering.
"In the context of a SPAC — a 'blank-check' entity without business operations — 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," Gurbir S. Grewal, director of the SEC's Division of Enforcement, said in a statement.
Trump Media & Technology Group (TMTG), based in Palm Beach, Florida, operates Trump's social media platform, Truth Social.
Digital World has struggled to execute the planned merger with TMTG, failing to rally enough shareholder support to close the transaction. Digital World will pay an $18 million penalty if it completes the deal, the SEC said.
For Trump Media, finalizing the deal would bring a critical injection of capital. Before its IPO, Digital World had raised roughly $300 million from investors, which agreed to pour more than $1 billion in funding to the merged entity.
Shares of Digital World jumped more than 17% after the settlement was announced.
- In:
- Donald Trump
Alain Sherter covers business and economic affairs for CBSNews.com.
TwitterveryGood! (3397)
Related
- 'Survivor' 47, Episode 9: Jeff Probst gave players another shocking twist. Who went home?
- 1000-lb Sisters' Tammy Slaton Struggling With Anxiety Over Driving Amid Transformation Journey
- Who is Natalia Grace? What to know about subject of docuseries, ‘Natalia Speaks’
- Why strangers raised $450,000 to help a dependable Burger King worker buy his first home
- School workers accused of giving special needs student with digestive issue hot Takis, other abuse
- California forces retailers to have 'gender-neutral' toy aisles. Why not let kids be kids?
- There’s a glimmer of hope for broader health coverage in Georgia, but also a good chance of a fizzle
- DHS Secretary Alejandro Mayorkas calls for bipartisan effort to address rise in migrant crossings
- Tom Brady Admits He Screwed Up as a Dad to Kids With Bridget Moynahan and Gisele Bündchen
- Body found in freezer at San Diego home may have been woman missing for years, police say
Ranking
- Halle Berry surprises crowd in iconic 2002 Elie Saab gown from her historic Oscar win
- House Speaker Mike Johnson urges Biden to use executive action at the southern border
- Has Washington won a national championship in football? History of the Huskies explained.
- Trains collide on Indonesia’s main island of Java, killing at least 3 people
- Police identify 7-year-old child killed in North Carolina weekend shooting
- NFL Week 18 picks: Will Texans or Colts complete final push into playoffs?
- Police in Kenya follow lion footprints from abandoned motorcycle, find dead man
- Travis Barker and Alabama Barker Get “Tatted Together” During Father-Daughter Night
Recommendation
-
Rōki Sasaki is coming to MLB: Dodgers the favorite to sign Japanese ace for cheap?
-
Italian Premier Meloni says curbing migrant arrivals from Africa is about investment, not charity
-
National championship game breakdown: These factors will decide Michigan vs. Washington
-
SpaceX accused of unlawfully firing employees who were critical of Elon Musk
-
Trump on Day 1: Begin deportation push, pardon Jan. 6 rioters and make his criminal cases vanish
-
Ailing, 53-year-old female elephant euthanized at Los Angeles Zoo
-
Former cycling world champ Rohan Dennis reportedly charged after Olympian wife Melissa Hoskins killed by car
-
Where is Jeffrey Epstein's island — and what reportedly happened on Little St. James?