Digital World Acquisition Reaches SEC Settlement Over Alleged Fraud Claims

By Sabela Ojea

The special purpose acquisition company Digital World Acquisition said Monday that it reached a settlement with the U.S. Securities and Exchange Commission's division of enforcement over alleged fraud claims.

The SPAC merging with Trump Media & Technology Group said it would enter a cease-and-desist order that would find the company violated certain antifraud provisions in connection with its initial public offering filings and other agreements related to the timing and discussions it had with Trump Media & Technology Group regarding the proposed business combination.

If Digital World Acquisition amends its previously filed Form S-4, it will pay the SEC an $18 million civil money penalty after closing any merger or business combination with Trump Media & Technology Group or any other entity.

Trump Media & Technology Group is not a party to the settlement and may terminate the merger agreement, but Digital World Acquisition's board of directors has authorized going forward with the settlement in principle.

Additionally, Digital World Acquisition said that Trump Media & Technology Group disagrees with extending the company's liquidation date by an additional three months, but that it expects to work with Trump Media & Technology Group "in good faith to address this disagreement in a manner that is in the best interest of its shareholders."

"The company remains very interested in the transaction with TMTG and is hopeful DWAC and TMTG can resolve this interpretative divergence," Digital World Acquisition said.

Write to Sabela Ojea at [e-mail]

(END) Dow Jones Newswires

July 03, 2023 18:34 ET (22:34 GMT)

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