Digital World Acquisition Corp, the company trying to take former President Donald Trump’s Truth Social platform public, has settled fraud charges with the Securities and Exchange Commission, according to reports.
DWAC was ordered to pay a $18 million civil penalty fee if it goes ahead with its planned merger and takes Trump Media and Technology Group public.
However, if the merger is not completed by January 1, 2025, and DWAC returns money to investors, the SEC has said it would waive the penalty.
The fraud charges are based on what the SEC called “extensive SPAC merger discussions” with Trump Media several months before the company filed paperwork to go public in September 2021.
In that filing, DWAC claimed it had not had any such discussions with potential acquisition targets prior to its IPO.
In April this year, the SEC charged three men in Florida with insider trading of DWAC stock also before the company announced plans to merge with Trump Media.
However, with some clarity in hand, investors have sent shares of DWAC nearly 60% higher Friday morning to $21.25.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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