Tag Archives: Truth Social

SEC Charges Digital World SPAC For Misrepresentation To Investors

The Securities and Exchange Commission announced settled fraud charges against Digital World Acquisition Corporation (DWAC), a special purpose acquisition company (SPAC), for making material misrepresentations in forms filed with the SEC as part of DWAC’s initial public offering and proposed merger with Trump Media & Technology Group Corp. (TMTG). The Commission finds that DWAC misled investors and the SEC by failing to disclose that it had formulated a plan to acquire and was pursuing the acquisition of TMTG prior to DWAC’s IPO.

According to the SEC, the purpose of a SPAC is to acquire an operating business. As such, steps were taken by a SPAC in furtherance of a particular acquisition are important to investors. According to the SEC’s order, DWAC filed an amended Form S-1 in support of its IPO in early September 2021 that stated that neither DWAC nor its officer and directors had had any discussions with any potential target companies prior to the IPO.

But, as found in the SEC’s order, dating back to February 2021, an individual who would later become the DWAC’s CEO and Board Chairman and others involved with the DWAC, had extensive SPAC merger discussions with TMTG. The SEC’s order further finds that while DWAC’s CEO and Chairman initially pursued these discussions with TMTG on behalf of another SPAC, he created a plan in the spring and summer of 2021 to potentially sue DWAC to propose a merger with TMTG and used this plan to solicit certain pre-IPO investors.

The order also finds that DWAC failed to disclose that the CEO had a potential conflict of interest based on an agreement he had signed with TMTG. As a result, DWAC’s amended Form S-1 was materially false and misleading…

CNBC reported that a SPAC, also known as a blank-check company, is a shell company that debuts on the public market with the stated intent to acquire an existing private company. SPAC’s are often used as a way for private companies to go public without the time-consuming and expensive process of raising money through a traditional initial public offering.

CNN also reported that last month, federal prosecutors arrested three investors charges related to Digital World’s deal with Trump’s media company. According to the indictment, the investors allegedly made more than $22 million by illegally trading on knowledge that DWAC would purchase TMTG – before it was public knowledge.

If I’m understanding this correctly, the DWAC was caught doing things that the SEC considered to be fraud. The fraud charges have been settled. The next step appears to get the acquisition done before whatever deadline they need to meet.

An Unauthorized Fox News Account Is On Truth Social

Fox News sounds like the kind of company that would want to be on Truth Social. It tends to provide information in a way that attracts people who are conservative. It has a history of being extremely supportive of former President Trump. Axios reported a verified Fox News account appeared on Truth Social. The strange thing is, Fox News was unaware of it.

Just days after a verified account for Fox News appeared on former President Trump’s social media app, Truth Social, a Fox News spokesperson says the network has nothing to do with the account.

Axios posted a screenshot of the Fox News account on Trump Social next to a screenshot of a post by Truth Social CEO Devin Nunes. The Fox News account has the Fox News name and logo. Devin Nunes wrote: “Great to have RSS feed for @FoxNews now LIVE here on TRUTH! This adds to @OAN and @NewsMax”.

According to Axios, the post by Devin Nunes has been taken down. A Fox News spokesperson told Axios, “We are not on Truth Social.”

So, what’s going on? Intelligencer reported that Truth Social has been trying to cultivate an air of legitimacy by creating pages for various media and sports brands, including @NFL, @FoxSports, and @ESPN. Though these accounts appear real, with official-looking names and logos, none were set up by the brands themselves.

Axios reported that real looking accounts for TMZ, NASA, and NASCAR have existed on Truth Social for months and are often promoted to new users. None are verified. Each has a small BOT disclaimer on their accounts. According to Axios, if you click the disclaimer, it reveals more. “This account is an RSS feed aggregating bot, and is not managed or affiliated with the referenced news outlet.”

Something is still fishy here. It appears that the Fox News account on Truth Social is the only RSS bot that is not labeled with the BOT disclaimer and the only bot that has been given a verified checkmark. A Fox News spokesperson claims the network has nothing to do with the account. This makes me wonder how many of the other bot accounts are running without the knowledge of the companies who own those logos and trademarks.

A quick Google search shows that it is possible to make an RSS bot that can be used to aggregate the content of one Twitter account. My best guess is that Truth Social is pulling content from Twitter via RSS bots. To me, this indicates that Truth Social is having difficulty convincing big companies to join its platform.

Three Top Executives Quit Trump Social

It is no secret that Truth Social has had some problems. Reuters reported that there is a Truth Social app for iPhone, but none for Android. According to Reuters, many who downloaded the app on their iPhone are on a waiting list, unable to access the platform.

Trump Media & Technology Group Chief Executive Devin Nunes, a former Republican congressman, said publicly that the company aimed to make the app fully operational within the United States by the end of March. We are now in April, and it appears that the waiting list problem still exists.

Reuters was the first to report that Josh Adams and Billy Boozer, Truth Social’s chiefs of technology and product development have both resigned. They lasted less than a year. Reuters obtained this information from interviews with eight people with knowledge of Truth Social’s activities, all of whom spoke on condition of anonymity. Billy Boozer declined to comment to Reuters and Josh Adams did not respond to a request from Reuters.

The exit of two executives critical to the app-launch efforts could imperil the company’s progress as it tries to prove it can compete with mainstream platforms such as Twitter, said two people familiar with the company…

According to Reuters, Josh Adams and Billy Boozer worked below Wes Moss and Andy Litinsky, both former castmates on “The Apprentice,” Trump’s reality TV show. The two men had reportedly been the “senior, day-to-day leadership” running the company. Reuters could not determine the specific job titles or responsibilities of Wes Moss and Andy Litinsky.

Politico reported that Lori Heyer-Bednar, Truth Social’s chief legal officer, has also quit.

According to Politico, Trump has been upset with the state of his social media venture, Truth Social, and is eying major shake-ups to the company, including positions on the board of Truth Social’s parent company, Trump Media and Technology Group. This information comes from two people familiar with the matter and a separate person as well.

It seems to me that a social media app that has a waiting list on iPhone and is nonexistent on Android is going to have problems attracting users. Having three top executives quit, in rapid succession, is very likely going to halt progress in improving the existing app and in creating one for Android. As a result, a frustrated Trump appears to be ready to go back to his days on “The Apprentice” by telling an unknown number of people, “You’re fired.”