Elizabeth Warren has demanded that Trump’s proposed SPAC transaction be investigated.

0

Trump’s proposed SPAC transaction should be investigated, according to Elizabeth Warren.

Sen. John McCain (R-AZ)

On Wednesday, Massachusetts Senator Elizabeth Warren (D) requested that the Securities and Exchange Commission (SEC) investigate the planned merger between former President Donald Trump’s new media and technology firm and a Special Purpose Acquisition Company, or SPAC.

In a letter to SEC Chairman Gary Gensler, Warren claimed Trump’s company “may have committed major securities breaches by conducting secret and confidential merger negotiations as early as May 2021,” before the agreement was revealed.

Last month, Trump announced that he was working on a new social media network called “Truth Social,” as well as that his Trump Media and Technology Group had merged with SPAC Digital World Acquisition Corp (DWAC).

In December, the blank-check company was established.

Trading in the SPAC was briefly suspended several times after Trump announced the merger.

The stock jumped 130 percent at one point.

According to Warren, under the Securities Act of 1933, SPACs are required to disclose any direct or indirect interaction with potential target firms in order to protect investors who join during an initial public offering (IPO).

“However, it appears that DWAC and Trump Media and Technology Group have brazenly flouted these rules,” Warren wrote.

She cited filings with the Securities and Exchange Commission (SEC) dating from May 25 to September.

The DWAC had previously stated that it did not select any “specific business combination target” or initiate “any substantive discussions, directly or indirectly, with any business combination target” on page 8 of its report.

According to Warren’s sources, the SPAC’s sponsor, Patrick Orlando, was in talks with Trump about a deal as early as March 2021, well before the SPAC filed its first report in May 2021 and launched its initial public offering in September 2021.

In the letter, Warren wrote, “The reports about DWAC and Trump Media and Technology Group appear to be a textbook example of a SPAC misleading shareholders and the public about materially important information.”

Warren claimed that DWAC’s failure to disclose early conversations “enriched big investors while trapping retail investors in a stock bubble,” noting that at least four institutional investors sold their unrestricted shares after DWAC announced its merger with Trump’s company.

The Massachusetts Democrat also raised concerns about Trump’s company’s lack of a business model, claiming that it “raises questions about the extent to which DWAC may be profiting off the SPAC model and its inherent disclosure failures.”

She expressed herself thus:

A brief summary of Brinkwire.

Share.

Comments are closed.