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Trump’s social media company, Trump Media & Technology Group, on Wednesday threatened to sue the Securities and Exchange Commission over the delayed merger with SPAC Digital World Acquisition (NASDAQ: DWAC).
“In light of the obvious conflicts of interest among SEC officials and clear indications of political bias, TMTG is now considering legal action against the SEC,” TMTG said in a statement. regulatory filing.
The comments come after Digital World (DWAC) fell 17% on Tuesday as the funding deadline for a $1 billion PIPE for the SPAC deal was set to expire. Investors in SPAC’s $1 billion PIPE funding are reportedly in talks with DWAC CEO Patrick Orlando to try to secure better terms that shift the risk to Trump and his backers and away from investors, according to a Financial Times report. DWAC-Stocks fell another 6.6% Wednesday.
“The SEC blocked its review of our proposed merger with DWAC, having failed to act despite DWAC filing its registration statement more than four months ago,” TMTG said in the filing. “This inexcusable stonewalling, which directly contradicts the SEC’s stated mission, hurts investors and many others who simply follow the rules and try to build a successful business.
TMTG’s statement comes as DWAC struggled to secure the 65% shareholders needed to approve the merger with Trump’s media company and postponed a shareholder vote until Oct. 10 as it attempts to get more votes. Only about 40% of holders voted in favor of the transaction, according to Saturday’s FT report.
DWAC has an extra lifeline to survive after the SPAC sponsor dropped $2.88 million to extend the time the company needs to complete its deal until December 8 by three months. This is the first of two three-month extensions under the company’s incorporation documents. DWAC previously warned that if the deal is not extended, SPAC could be forced into liquidation.
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