Shares of the Special Purpose Acquisition Company (SPAC), Digital World Acquisition (NASDAQ: DWAC), surged on Friday after it reached a settlement with the Securities and Exchange Commission’s Enforcement Division in relation to the company’s deal to take Trump’s social media platform, Truth Social, public.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
If this merger transaction is completed, DWAC will have to pay a fine of $18 million. The SEC stated that DWAC “violated certain antifraud provisions of the Securities Act and the Exchange Act, in connection with the Company’s IPO filings on Form S-1 and the Form S-4 concerning certain statements, agreements and omissions relating to the timing and discussions the Company had with TMTG [Trump Media and Technology Group] regarding the proposed business combination.”
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, commented, “DWAC failed to disclose its discussions with TMTG and failed to disclose a material conflict of interest of its CEO and Chairman.”
DWAC has until September 8 to complete its deal with Trump Media. However, TMTG has told DWAC that it disagrees with the extension of the liquidation deadline by an additional three months. DWAC will have to return the money it has raised to its investors if the deal is not completed by the deadline.
In the past year, DWAC stock has lost around 59%.
