Tag: sec

Donald Trump’s Social Media Firm Said to Receive Subpoenas From SEC, Federal Jury

Donald Trump’s social media company and some of its employees received subpoenas from both a federal grand jury and securities regulators, according to a public disclosure Friday, possibly delaying or even killing a deal promising a cash infusion needed to take on Twitter.

Trump Media & Technology Group received subpoenas from a grand jury in New York and the Securities and Exchange Commission, according to a securities document filed by Digital World Acquisition on Friday. Digital World has plans to buy Trump Media, releasing $1.3 billion (roughly Rs. 10,263 crore) for its fledging business, but the deal is unlikely to be done during two legal probes.

Trump, who is Trump Media’s chairman, was not among the employees who received subpoenas, according to a Trump Media statement.

On Monday, Digital World announced it had received subpoenas from the same grand jury convened by the Manhattan US Attorney’s Office. Digital World has been under investigation by the SEC for possible violations for months, a development that has weighed on the stock.

Digital World stock closed Friday at $5.78 (roughly Rs. 450), down 25 percent in a week. It had been at over $100 (roughly Rs. 7,800) last year after the company announced it had a deal to buy the former president’s social media firm.

The SEC has been looking into whether Digital World broke rules by having substantial talks about buying Trump’s company starting early last year before Digital World sold stock to the public for the first time in September. Just weeks later it announced it would be buying Trump’s company.

Digital World is one of a once-popular group of “blank-check” companies that go public as empty corporate entities with no operations, only offering investors the promise they will buy a business in the future. As such, they are allowed to sell stock to the public quickly without the usual regulatory disclosures and delays, but only if they haven’t already lined up possible acquisition targets.

Trump’s social media offering, called Truth Social, launched in February. It said it is fighting Big Tech limits on speech. Trump was banned from Twitter, Facebook and YouTube last year after the January 6 Capitol riot.

Trump Media last year lined up dozens of investors to pump $1 billion (roughly Rs. 7,895 crore) into the company, but can’t get the cash until the Digital World acquisition is completed. An additional $300 million (roughly Rs. 2,368 crore) would come from Digital World itself.

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Elon Musk to Explain Delay in Reporting Twitter Stocks Buy, Says US Regulators

US market authorities have asked Elon Musk to explain an apparent delay in reporting his Twitter stock buys, the agency revealed Friday, the latest questions on the methods and intent of his troubled bid for the platform.

Musk became a major Twitter stockholder following the purchase of 73.5 million shares in early April, and less than two weeks later launched a hostile takeover bid.

He went on to ink a $44 billion (roughly Rs. 3,41,800 crore) deal to buy the San Francisco-based company, but has since given mixed signals regarding how committed he is to following through.

The Securities and Exchange Commission (SEC) letter to Musk showed regulators asked him to explain why he didn’t disclose within a required 10-day time period his increased stake in Twitter, especially if he planned to buy the company.

“Your response should address, among other things, your recent public statements on the Twitter platform regarding Twitter, including statements questioning whether Twitter rigorously adheres to free speech principles,” regulators said in the letter dated April 4.

Neither Musk nor the SEC immediately responded to requests for comment.

The Tesla chief is a frequent Twitter user, regularly firing off inflammatory and controversial statements about issues or other public figures with remarks that are whimsical or business-focused.

He has sparred repeatedly with federal securities regulators, who cracked down on his social media use after a purported effort to take Tesla private in 2018 fell apart.

Musk has cited the right to freedom of speech as a driver of his efforts to undo an agreement with the SEC that tightened his use of the social media platform following his August 2018 tweet that funding was “secured” to take Tesla private.

Musk also faces a lawsuit filed this week accusing him of pushing down Twitter’s stock price in order to either give himself an escape hatch from his buyout bid, or room to negotiate a discount.

The suit alleges Musk tweeted and made statements intended to create doubt about the deal, which has roiled the social media platform for weeks.

“Musk proceeded to make statements, send tweets, and engage in conduct designed to create doubt about the deal and drive Twitter’s stock down substantially,” according to the complaint.

His aim was to gain leverage to get Twitter at a much cheaper price, or back out of the deal without suffering any penalty, the suit argued.

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