US regulators scrutinize Trump Media deal

NEW YORK - US regulators are scrutinizing a deal between Donald Trump's fledgling social media company and an investment vehicle to bring the former president's venture to the stock market, documents show Monday Dec 6 The companies plan to launch TRUTH Social nationally early next year, hoping to rival services like Twitter, which banned Trump over the January US Capitol riot.

Digital World Acquisition Corp DWAC, which is partnering with Trump, reported in a filing to the Securities and Exchange Commission that it received preliminary fact-finding inquiries from regulatory authorities, with which it is cooperating. Digital World, which is already listed on Wall Street, announced in late October that it would merge with Trump Media Technology Group TMTG, allowing the ex-president's venture to be listed without the usual procedures.

A group of institutional investors committed to contributing US $1 billion to the transaction, according to a joint statement by the two companies on Saturday.

They did not specify the identity of the investors in the regulatory document.

Digital World says the SEC is looking into details of its board meetings, brokerage procedures, the identity of certain investors and dealings with Trump's company.

The Financial Industry Regulation Authority asked for information from DWAC about its stock activity prior to the official announcement of the TMTG deal on October 20.

The investigation does not mean that the SEC has a negative opinion about DWAC or any person, event or security, or any person, according to Digital World's filing.

Its stock was down three percent at around 1645 GMT on Wall Street.

Digital World is a special purpose acquisition company called SPAC, sometimes called a blank check company because it is set up with the sole purpose of merging with another entity.

Trump says that the platform will be an alternative to Silicon Valley internet companies that he says are biased against him and other conservative voices.

The 75-year-old was thrown off Twitter after the January 6 insurrection, as well as Facebook and YouTube after a mob of Trump supporters falsely claimed that the November 2020 election was stolen from him, and attacked the US Capitol.

It is currently available for pre-order on the App Store, and is expected to launch in the first quarter of 2022.