The investment vehicle seeking to merge with Donald Trump’s social media firm revealed on Monday that it had received federal subpoenas, delaying and potentially derailing the deal.
Digital World Acquisition said it and its board members received grand jury subpoenas on issues including due diligence on the Trump business and communications with potential merger partners other than the Trump firm, according to a Securities and Exchange filing.
The Southern District of New York subpoenas relate to a Justice Department investigation that “may materially delay, impede or prevent the completion of the business combination,” the filing said.
First launched in September on Wall Street, DWAC was created as a special purpose acquisition company (SPAC), sometimes referred to as a “blank check” company created for the sole purpose of merging with another entity that is announced after the entity’s IPO.
In late October, DWAC announced plans to partner with Trump’s firm to establish “a rival to the liberal media consortium.”
The deal, which would provide Trump’s company with $1.3 billion in capital and a public listing, has been the subject of an SEC investigation for months over similar issues raised by the subpoenas. of the DOJ.
The SEC investigation focused on whether talks had taken place between Trump’s team and senior DWAC figures prior to the public offering, according to a New York Times report. SPACs are not supposed to have a goal aligned before selling shares.
Shares of DWAC fell 9.4% to $25.22 in afternoon trading.