Digital World board members get subpoena over Trump's social media deal

FILE PHOTO: Former U.S. President Donald Trump speaks to an audience at the "American Freedom Tour" event in Memphis, Tennessee, U.S., June 18, 2022. REUTERS/Karen Pulfer Focht/File Photo

(Reuters) -Blank-check firm Digital World Acquisition Corp said on Monday each of its board directors had received subpoenas from federal prosecutors over the company's merger plans with former U.S President Donald Trump's social media firm.

The federal probe is the latest setback to Trump's efforts to take Trump Media & Technology Group Corp (TMTG), the creator of social media platform Truth Social, public. TMTG in October agreed to merge with Digital World and was expecting the deal to close by the second half of this year.

Shares of Digital World fell 6% in premarket trading after the company said in a regulatory filing that it became aware that a federal grand jury in the Southern District of New York had issued subpoenas to its directors.

The company had seven directors on its board, as of April 13, including Chief Executive Officer Patrick Orlando and Chief Financial Officer Luis Orleans-Braganza.

On June 24, a grand jury subpoena was also sent to the company, the filing by Digital World showed.

Earlier this month, the company reported that the U.S Securities and Exchange Commision (SEC) and the Financial Industry Regulatory Authority, which have been probing its deal with TMTG since late last year, had also sought more information.

The latest subpoenas to Digital World sought the same documents as the SEC probe as well as requests relating to the company's S-1 filings.

Digital World also said Bruce Garelick, chief strategy officer of Rocket One Capital, a Miami-based investment firm, was resigning from the board. Some of the information requested by the grand jury was about communications with Rocket One.

Michael Shvartsman, founder and CEO of Rocket One Capital, did not immediately reply to a Reuters request for comment.

"Will cooperate with oversight that supports the SEC's important mission of protecting retail investors," TMTG said.

(Reporting by Eva Mathews in Bengaluru; Editing by Shinjini Ganguli)

Article type: free
User access status:
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!


Next In Tech News

Walmart held talks on streaming deal with Disney, Comcast and Paramount- NYT
AppLovin offers to buy video game software maker Unity in $17.5 billion deal
Crypto exchange Nuri files for insolvency in Germany
Dreaded 'down rounds' shave billions off startup valuations
Foxconn to build autonomous electric tractors at Ohio facility
FedEx unit to test Ford's electric vans for parcel delivery
Emerson Electric profit jumps 47% on strength in automation unit
Chipmaker Micron forecasts negative free cash flow for first quarter
Iran makes first import order using cryptocurrency - report
China’s strict Covid-19 control measures, not video game licensing curbs, are wreaking havoc on esports market, insiders say

Others Also Read