Blow for Trump’s Truth Social as merger company hit by grand jury subpoenas

A ​​US federal grand jury has issued subpoenas to the board members of the company merging with Donald Trump’s social media company, Truth Social.

The disclosure, made on Monday by the blank cheque company Digital World Acquisition Corporation, is the latest blow to Trump’s plans to take Trump Media & Technology Group (TMTG), the creator of Truth Social, public.

TMTG agreed to merge with Digital World last October and was expecting the deal to close by the second half of this year. Both the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority, are investigating the merger.

The news is likely to further delay the merger, which would provide Truth Social with $1.3bn in capital, in addition to a stock market listing.

Shares of Digital World fell 9% in morning trading after the company said in a regulatory filing that it had become aware that a federal grand jury in the southern district of New York had issued subpoenas to its directors.

Digital World is a special purpose acquisition company (Spac), a blank cheque company set up to go public and then find a company to merge with. Spacs are not supposed to have a deal lined up before they go public.

The SEC is investigating whether or not Digital World and Trump Media held serious discussions before the Spac went public last September and, if so, why those talks were not disclosed in regulatory filings.

Digital World also said Bruce Garelick, chief strategy officer of Rocket One Capital, a Miami-based investment firm, was resigning from the board. Some of the information requested by the grand jury was about communications with Rocket One.

Michael Shvartsman, founder and chief executive of Rocket One Capital, did not immediately reply to a Reuters request for comment.

“We will cooperate with oversight that supports the SEC’s important mission of protecting retail investors,” TMTG said.

Truth Social was launched after Trump was banned from Twitter, where he had more than 88 million followers. Trump currently has 3.37 million followers on Truth Social. The app has had a rocky rollout, plagued by delays, and is still not available to Android mobile users.

Reuters contributed to this article

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