By Matt Egan, CNN Business
Updated 5:38 PM ET, Mon December 6, 2021
(CNN)The shell company that is facilitating former President Donald Trump’s return to Wall Street disclosed Monday that federal regulators are investigating the deal.In October, Trump announced a new media venture that would “stand up to the tyranny of Big Tech.” That new entity, chaired by the former president, agreed to go public through a merger with Digital World, a Special Purpose Acquisition Company, or SPAC.In a filing Monday, Digital World Acquisition Corp. said it received a document and information request from the Securities and Exchange Commission in early November. Among other items, Digital World said the SEC request sought documents and communications between Digital World and Trump Media and Technology Group.
Digital World also said Wall Street’s self-regulator, the Financial Industry Regulatory Authority, or FINRA, is looking into trading prior to the deal’s announcement.
Shares of Digital World skyrocketed as much as 1,657% in the days after the deal was announced. The company achieved meme stock status almost overnight, even though little is known about the venture. Filings did not indicate how much revenue, if any, the firm generates.
But almost immediately the deal drew scrutiny. Trump began discussing a merger with Digital World long before the blank-check company went public and before such talks were disclosed to investors, The New York Times reported in late October.
Curiously, TMTG did not disclose who the investors committing $1 billion are, other than to say they are a “diverse group” of institutional investors.Later on Monday, TMTG announced that Republican Rep. Devin Nunes of California will become its CEO next month. Nunes said in a letter to his constituents that he’ll leave the House in the coming weeks.