Federal regulators deepen probe into Trump’s social media deal

(Reuters) – Special purpose acquisition company Digital World Acquisition Corp disclosed on Monday financial regulators probing its deal with former U.S. President Donald Trump’s social media firm have sought more information, while warning this could potentially delay the deal.

Shares of the SPAC, which have lost nearly 15% so far this year, were down about 10% in premarket trading. The company signed a deal in October to merge with Trump Media & Technology Group Corp (TMTG), the creator of social media platform Truth Social.

The U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority have been investigating the deal since late last year.

The regulators have asked for additional documents on due diligence of potential targets other than TMTG, relationships between Digital World and other entities, including ARC Global Investments and advisors.

They had earlier sought documents on communications between Digital World and TMTG, meetings of Digital World’s board, policies and procedures relating to trading, the identification of banking, telephone, and email addresses and the identities of certain investors.

The company said the regulators’ latest action could delay the SPAC deal, which was expected to close in the second half of this year.

(Reporting by Nivedita Balu in Bengaluru; Editing by Arun Koyyur)