The federal securities regulators are investigating a merger between an acquisition company and Donald Trump's Truth Social, according to a filing made with the Securities Exchange Commission (SEC) on Monday.
We obtained a copy of the filing for you here.
The financial prospects of Truth Social are reliant on the merger with Digital World Acquisition Corp (DWAC). The investigation is supposed to determine whether negotiations between the two sides began before DWAC went public.
The investigation into Truth Social was started after a request from Senator Elizabeth Warren who last year wrote a letter to the SEC Chair Gary Gensler saying that she was, “concerned for some time about the misaligned incentives underlying SPAC deals, which are often structured to exploit retail investors to the benefit of large institutional investors such as hedge funds, venture capital insiders, and investment banks.”
We obtained a copy of that letter for you here.
DWAC had already revealed that it was being investigated. The Monday filing says that the SEC has expanded the investigation by requesting “additional documents and information.”
The securities regulator say it wants to know if DWAC conducted due diligence in deals with other companies other than Trump's, its relationships with other companies, “certain elements of the transaction history for equity,” and other forward-looking statements.
Truth Social officially launched a few months ago on iPhone devices. Last month, it announced beta testing of the web app.