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 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, down 25 percent
in a week. It had been at over $100 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 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.