In announcing a settlement with Digital World Acquisition Corporation, 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.
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 beforeDigital 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,
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