The CEO of Digital World Acquisition Group (DWAC) — a so-called “blank check” company that announced it would be merging with the new Trump social media company known as the Trump Media & Technology Group (TMTG) — has been hit with a lawsuit involving allegations of fraud. That case was brought by Brian Shevland, a private equity investor who claims that company CEO Patrick Orlando removed him from his position as an “early director nominee” for the company “without warning or notification,” Axios explains. The removal, Axios notes, based on Shevland’s arguments, “denied him thousands of shares and the ability to buy more stock at a very low price.”
Although striking fluctuations have been recorded in the stock price for the company, that price does remain significantly higher than it was much earlier on, before the planned merger with the Trump firm — which is planning to launch an alternative social media site — was announced. According to Axios, “one remedy proposed by Shevland is for him to be able to buy shares at $0.003 a piece, compared to the SPAC IPO price of $10 and the current market price of $51.33.” (That share price was recorded on Thursday; on early Friday, it dropped and was no doubt set to continue shifting.)
Trump’s not an officeholder.
He’s not a candidate.
He’s got millions in the bank, $100M in his PAC and a billion-dollar SPAC.But the RNC is still using their money to pay his bills. https://t.co/UCrwUDuHIZ
— David Fahrenthold (@Fahrenthold) December 16, 2021
Axios notes that Shevland’s case “suggests that conversations between Orlando and Trump began months before DWAC went public, which could violate federal securities law.” DWAC has revealed that its operations, including communications with Trump’s people, are, in fact, under investigation by federal authorities. Sen. Elizabeth Warren (D-Mass.) has previously observed how those behind DWAC “may have committed securities violations by holding private and undisclosed discussions about the merger as early as May 2021, while omitting this information” from filings with the Securities and Exchange Commission (SEC), and the SEC is now among those investigating the company.
UPDATE on Trump's new "media company":
No customers
No revenue
No product
One (1) SEC investigation
One (1) lawsuit alleging "brazen fraud"https://t.co/82VacH830w pic.twitter.com/mOMsvu75Af
— Judd Legum (@JuddLegum) December 17, 2021
According to DWAC, the SEC was after “documents relating to meetings of DWAC’s Board of Directors, policies and procedures relating to trading, the identification of banking, telephone, and email addresses, the identities of certain investors, and certain documents and communications between DWAC and TMTG.” On a similar note, investigators at the Financial Industry Regulatory Authority (FINRA) have sought information related to “events (specifically, a review of trading) that preceded the public announcement of the October 20, 2021 Merger Agreement,” also according to the company. As for what the company is actually doing, there’d been an announcement at one point that an early version of Trump’s planned social media site would appear in November, but it never showed up.
Ethics watchdog American Oversight has sued the Departments of Justice and Homeland Security to compel the release of docs including any comms that top Trump officials may have had with Fox, the Trump campaign, or other proponents of the Big Lie in the weeks surrounding Jan. 6.
— Kyle Griffin (@kylegriffin1) December 17, 2021
