Donald Trump speaks during a retreat with Republican lawmakers at Camp David in Thurmont, Maryland ... [+]
Authorities are probing Donald Trump’s new social media venture, which has ambitions to launch a Twitter knockoff and other businesses, according to a Securities and Exchange Commission filing released Monday.
In late October and early November, the Financial Industry Regulatory Authority requested information about trading that occurred before the Trump Media and Technology Group announced plans to go public via a special purpose acquisition company, or a SPAC.
The Securities and Exchange Commission also asked about several matters. For instance, the SEC requested information about communications between the SPAC and the Trump Media and Technology Group. Why might the SEC be interested in such a thing? In September, the SPAC claimed in an SEC filing that there had been no “substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination,” but a month later, the New York Times reported that the SPAC’s chief executive had in fact been talking about a possible deal with Trump since at least March.
The SEC also asked about the identities of certain investors. Even though there are billions of dollars riding on the venture, it remains unclear who exactly has a stake in it. Donald Trump is considered the chairman of the Trump Media and Technology Group, and a merger agreement referred to him as the “company principal.” But it’s still unclear exactly what percentage of the business he owns. In addition, the venture announced a $1 billion deal on Saturday to bring in new investors, without naming who those investors are.
Neither FINRA nor the SEC said it had determined that anyone had violated the law, according to the filing released Monday. Representatives of the Trump Organization and the SPAC did not respond to requests for comment.
The news adds to the uncertainty surrounding the venture, which thrilled retail investors when Trump announced it on Oct. 20. Shares soared from $10 to a momentary high of $175 two days later, enriching some investors. Several Wall Street firms sold their stock, cashing out gains. Everyday traders with a fondness for Trump, meanwhile, paid up for a chance to get into business with the former president.
Many of those retail investors—including Rep. Marjorie Taylor Greene—have lost money since, as shares have tapered off more recently. By midafternoon on Monday, stock in the SPAC had dropped 2% $44 per share.
