A blank check company that was about to merge with former U.S. President Donald Trump’s media company and is under regulatory investigation has reached a settlement with Securities and Exchange Commission staff, as shown Monday.
Special Purpose Acquisition (SPAC) firm Digital World Acquisition Corp said in a filing that the deal was essentially and never yet final, with terms subject to SEC approval.
In October 2021, Trump’s newly formed media company, Trump Media & Technology Group (TMTG), announced a deal to go public by merging with DWAC.
However the SPAC deal was doubtful after the Department of Justice and the SEC said they were investigating it.
If the SEC approves the settlement, it should issue a stop and desist order, finding that DWAC violated certain anti-fraud laws in connection with the proposed merger.
Failure to settle with the SEC would create a “significant risk of prolonged litigation” and will prevent the corporate from merging with TMTG or another goal, DWAC said within the filing.
While Trump’s media company is just not party to the settlement or any negotiations, DWAC also cannot settle without the corporate’s written approval.