Trump media company gets subpoena in federal criminal investigation into SPAC deal

Former US President Donald Trump delivers the keynote address at the Faith & Freedom Coalition at their annual “Road To Majority Policy Conference” at the Gaylord Opryland Resort & Convention Center on June 17, 2022 in Nashville, Tennessee.

Seth Herald | Getty Images

Donald Trump’s media company has been subpoenaed by a federal grand jury in connection with a criminal investigation, according to the company with which the former president’s company plans to merge.

Digital World Acquisition Corp. said in a filing Friday that Trump Media and Technology Group received a subpoena from the grand jury in Manhattan on Thursday. The Trump company also received a subpoena from the Securities and Exchange Commission on Monday regarding a civil investigation, DWAC said.

DWAC also said some current and former TMTG employees have also recently received subpoenas from the grand jury. Later Friday, TMTG said it would comply with the subpoenas, and none of them were addressed to its chairman, Trump, or CEO, former US Representative Devin Nunes.

The filing came days after DWAC said the government investigation could delay or even prevent the merger with Trump’s newly formed company, which includes Truth Social, a social media app intended as an alternative to Twitter.

Neither TMTG nor a Trump spokeswoman immediately responded to CNBC’s requests for comment.

The Justice Department and the SEC, which regulates the stock market, are investigating the deal between DWAC and Trump Media. By merging with DWAC, a type of shell company called a special purpose acquisition company, or SPAC, Trump’s company would gain access to potentially billions of dollars in public stock markets.

Trump established Truth Social months after Twitter banned him from his tweets on Jan. 6, 2021, when hundreds of his supporters stormed the U.S. Capitol in an attempt to reverse Joe Biden’s victory in the presidential election.

Trump Media CEO Nunes is one of the former president’s most staunch loyalists in the Republican Party. Trump is also considering whether to run for president in the 2024 election.

Trump has continued to spread the lie that the election was stolen from him. His alleged involvement in the January 6 uprising is under investigation by a select House committee that accused the former president of being the center of a multiple conspiracy to block the peaceful transfer of power to Biden.

Early criticism of the Trump-DWAC deal came from Senator Elizabeth Warren, D-Mass. Calling for an investigation, she wrote to SEC Chair Gary Gensler in November, telling him that DWAC “may have committed securities violations through private and undisclosed discussions of the merger as early as May 2021, while this information is omitted in.” [SEC] filing and other public statements.”

DWAC stocks are far from their highs, closing at $24.20 Friday. The stock had surged above $90 in October after the deal with Trump’s group was announced.

DWAC disclosed in a securities filing Monday that it learned on June 16 that every member of its board of directors had received subpoenas from the same federal grand jury.

The grand jury sought documents similar to those the SEC had already requested as part of its civil investigation, DWAC said. The company itself was subpoenaed a week ago with similar requests, along with other communications, individuals and information requests related to Rocket One Capital.

DWAC also revealed Monday that a board member, Bruce J. Garelick, had told management he would be stepping down from the board in the past week. Garelick said his resignation was “not the result of any disagreement with Digital World’s activities, policies or practices,” according to the company’s filing.

— Kevin Breuninger and Thomas Franck of CNBC contributed to this story.

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