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The social media app will be developed by Trump Media & Technology Group (TMTG).
Rafael Henrique | Light Rocket | Getty Images
shares Digital World Acquisition Company. The shell company seeking to popularize former President Donald Trump’s social media platform rose more than 50% on Friday after the company announced it had done so. Pay fraud fees With the Securities and Exchange Commission for $18 million.
That increase sent DWAC shares up nearly $20, which is still a far cry from its highs above $95 in March of last year.
DWAC is a Special Purpose Acquisition Company, or SPAC, that announced plans to merge with Truth Social parent company, Trump Media & Technology Group in October 2021. The merger has since faced numerous delays.
The DWAC settlement to the SEC dictates that the company must pay $18 million in civil fees if it merges with TMTG and takes the company public. But if the merger doesn’t happen before the Jan. 1, 2025 deadline, and if DWAC returns investors’ money, the SEC has agreed to waive the penalty.
The SEC claimed that merger discussions had taken place. It is illegal for SPACS to request specific merger goals prior to an actual initial public offering.
The settlement also comes on the heels of the US government charging three Florida men with insider trading related to DWAC.
The company’s stock previously witnessed increases in line with the news related to the former president, with shares rising, for example, after Trump’s announcement in the 2024 presidential elections and the impeachment decision.
But the DWAC settlement is the latest in a growing list of legal problems that have blighted Trump and his business since he left the White House in 2021.
He is currently facing government charges in New York that his company falsified business records. He was also indicted in federal court last month for allegedly mishandling classified documents. Trump pleaded not guilty in either case.
Authorities in Georgia are also investigating Trump, the frontrunner for the 2024 Republican nomination, over his attempts to overturn his loss in the 2020 presidential election.
Neither the DWAC team nor Trump’s team immediately responded to requests for comment.
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