Jun 13, 2022 - Economy

Government expands investigation into Trump's social network deal

Illustration of an angry facebook emoji that resembles Donald Trump

Illustration: Sarah Grillo/Axios

Federal securities regulators have expanded their investigation into the planned merger between a blank check acquisition company and former President Trump's social media business, known as Truth Social, according to a Monday morning filing with the SEC.

Why it matters: Truth Social's financial prospects are heavily reliant on investment tied to the merger, which may never come to pass.

Backstory: The Securities and Exchange Commission is investigating communications between the blank check company, called Digital World Acquisition Corp., and Trump. Of particular interest would be if the two sides negotiated prior to DWAC going public, which would have been illegal.

What's new: DWAC previously disclosed that it was under investigation, but on Monday said that regulators are seeking "additional documents and information."

  • This includes communications regarding DWAC's due diligence of companies other than Trump's, if it occurred, relationships between DWAC and other entities (including its IPO underwriter E.F. Hutton), certain forward-looking statements and "certain elements of the transaction history for equity."

State of play: Truth Social launched this past spring as a re-skinned Twitter, with Trump beginning to use it as a communication tool last month. He currently has 3.25 million followers on the platform.

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