Trump-tied SPAC reaches agreement with SEC staff over merger
8:17 pm Monday, July 03rd, 2023
(Reuters) – A blank-check firm, which was set to merge with former U.S. President Donald Trump’s media company and under regulatory investigation, has reached an agreement with the staff of the Securities and Exchange Commission, a filing showed on Monday.
The special purpose acquisition company (SPAC), Digital World Acquisition Corp, said in the filing that the agreement was in principle and not yet definitive, and the terms were subject to the SEC’s 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. But the SPAC deal was in doubt after the Justice Department and the SEC said they were investigating it.
If the SEC approves the settlement, it will enter a cease-and-desist order finding DWAC violated certain antifraud provisions in connection with the proposed merger.
Failure to settle with the SEC would create “a substantial risk of protracted litigation” and could inhibit the company’s ability to merge with TMTG or any other target, DWAC said in the filing.
While Trump’s media firm is not party to the settlement or any negotiations, DWAC cannot settle without the company’s written consent either, it said.
(Reporting by Arshreet Singh; Editing by Shweta Agarwal)
