2023-03-15 15:06:33 ET
Trump SPAC Digital World Acquisition ( NASDAQ: DWAC ), which is taking Trump's social media company and Truth Social app public, dropped 4.5% amid a report that federal prosecutors were probing whether the social media company may have allegedly violated money laundering rules.
Federal prosecutors in New York last year started examining whether Trump Media & Technology may have violated money laundering regulations in connection with the acceptance of $8 million from an entity with alleged Russian ties, according to a Guardian report on Wednesday, which cited sources familiar.
Towards the end of last year prosecutors began looking at two loans totaling $8 million to Trump Media, according to the report. The expanded nature of the criminal investigation threatens to delay the deal with SPAC Digital World ( DWAC ) even further.
Outside counsel for Trump Media declined to comment to the Guardian on the investigation. Trump Media didn't immediately respond to Seeking Alpha email request for comment.
The SEC last year issued subpoenas that sought information in regards to the combination of Trump Media & Technology Group and DWAC. DWAC shares have plunged 88% since hitting highs in early March of last year as investors are concerned about the SEC delays and Trump's likely return to competing social media platforms such as Twitter and Facebook after he was banned following the attack on the U.S. Capitol in January of 2021.
The latest report comes after Trump Media & Technology late last month asked Congress to probe the SEC's review of the company's planned merger with DWAC. Trump Media is asking for Congress to help investigate "egregious conduct" and "blatant politicization" of the SEC's review of the transaction.
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Trump SPAC Digital World falls amid report of probe into alleged money laundering