The investment vehicle, which is seeking a merger with Donald Trump’s social media venture, announced Monday that it has received federal subpoenas that are delaying and potentially derailing the transaction.
Digital World Acquisition said it and its board members have received grand jury subpoenas on issues involving due diligence of the Trump venture and communications with potential merger partners other than the Trump venture, according to a filing with the Securities and Exchange.
The subpoenas from the Southern District of New York relate to a Department of Justice investigation that “could materially delay, materially obstruct or prevent the consummation of the business combination,” the filing states.
First incorporated on Wall Street in September, DWAC was incorporated as a Special Purpose Acquisition Company (SPAC), sometimes referred to as a “blank check” corporation, formed for the sole purpose of merging with another company post-IPO of the company is announced.
In late October, DWAC announced plans to merge with Trump’s company to create “a rival to the liberal media consortium.”
The deal, which would give Trump’s company $1.3 billion in capital and a public listing, has been under investigation by the SEC for months over similar issues raised by the DOJ subpoenas.
The SEC investigation has focused on whether talks between Trump’s team and DWAC officials took place prior to the public offering, according to a New York Times report. SPACs shouldn’t have a target before they sell stock.
Shares of DWAC fell 9.4 percent to $25.22 in afternoon trade.
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