The U.S. Securities and Exchange Commission has charged three men with scheming to make $22 million in profits by trading ahead of the announced merger between former President Donald Trump’s social media company, that includes Truth Social, and a public shell company called Digital World Acquisition Corp (DWAC).
The three claimed they were never associated with Trump.
We’ve curated insightful analysis on what this means for Truth Social.
- Trump discussing a potential merger with DWAC’s CEO before DWAC itself went public — as the complaint alleges — could have potentially violated federal securities laws, suggests Axios’ Dan Primack.
- Truth Social will not hit its projected goal of 81 million users until 2086 if it continues growing at its current pace. The most likely outcome is that the platform will join the club of Trump’s other unsuccessful business ventures, like Trump Steaks and Trump University. — Forbes India
- Given the merger’s legal and regulatory nightmares, both parties should walk away from the merger, Primack wrote earlier this month. With Truth Social’s tiny reach, especially compared to Twitter, it requires investment which is unlikely to come from DWAC given its legal troubles. — Axios
Prosecutors allege the three men associated with Digital World Acquisition Corporation violated their non-disclosure agreements by purchasing more stock in the company after being informed about the merger before Digital World went public, and subsequently selling them off after the announcement when the share price skyrocketed. Share prices have since plummeted for Digital World.