From the “this might not help the share price” department comes news that Patrick Orlando who is the former CEO of Digital World Acquisition Company, which was a shell company that helped to take social media platform Truth Social public is being sued for securities fraud by the SEC:
In a filing with the court of District of Columbia, the SEC said Orlando broke rules concerning securities by issuing false and misleading statements while he led the blank-check firm.
Orlando misled investors by failing to disclose that his company had formulated a plan to acquire Trump Media & Technology Group Corp and was pursuing the acquisition before DWAC’s initial public offering, according to the filing.
In March, Digital World completed its merger with Trump Media & Technology Group that owns social media platform Truth Social, which is backed by Trump.
In July last year, DWAC had settled regulatory charges of “material misrepresentations” to investors.
The SEC had said DWAC was found to have violated antifraud provisions of federal securities laws. The company had agreed to a cease-and-desist order and to pay an $18 million penalty if it closes the merger.
Now news like this won’t help the stock price of a normal stock. But Trump Media is the definition of a meme stock as it is grossly overvalued. So the normal rules don’t apply. Having said that, this likely isn’t going to be good news for the stock and Trump Media. Thus it will be interesting to see what effect that this lawsuit has on both parties.
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This entry was posted on July 18, 2024 at 1:49 pm and is filed under Commentary with tags Donald Trump. You can follow any responses to this entry through the RSS 2.0 feed.
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Former Trump Media Shell Company CEO Hit With Lawsuit Alleging Securities Fraud
From the “this might not help the share price” department comes news that Patrick Orlando who is the former CEO of Digital World Acquisition Company, which was a shell company that helped to take social media platform Truth Social public is being sued for securities fraud by the SEC:
In a filing with the court of District of Columbia, the SEC said Orlando broke rules concerning securities by issuing false and misleading statements while he led the blank-check firm.
Orlando misled investors by failing to disclose that his company had formulated a plan to acquire Trump Media & Technology Group Corp and was pursuing the acquisition before DWAC’s initial public offering, according to the filing.
In March, Digital World completed its merger with Trump Media & Technology Group that owns social media platform Truth Social, which is backed by Trump.
In July last year, DWAC had settled regulatory charges of “material misrepresentations” to investors.
The SEC had said DWAC was found to have violated antifraud provisions of federal securities laws. The company had agreed to a cease-and-desist order and to pay an $18 million penalty if it closes the merger.
Now news like this won’t help the stock price of a normal stock. But Trump Media is the definition of a meme stock as it is grossly overvalued. So the normal rules don’t apply. Having said that, this likely isn’t going to be good news for the stock and Trump Media. Thus it will be interesting to see what effect that this lawsuit has on both parties.
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This entry was posted on July 18, 2024 at 1:49 pm and is filed under Commentary with tags Donald Trump. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.