Donald Trump's SPAC merger may have violated securities laws, a report says

Trump's new media company was recently announced.

Chris Delmas/AFP/Getty Images

• Trump and DWAC leaders may have spoken about a merger in March, The New York Times reported.
• Securities laws restrict SPACs from discussions about mergers prior to their public listings.
• DWAC said in its S-1 filing it hadn't had "substantive" talks with potential targets.

Former President Donald Trump and the founder of the SPAC that is merging with his new media company may have discussed the deal in March 2021, The New York Times reported.

Such a discussion could potentially have broken laws governing when SPACs can enter conversations with potential partners, the publication added.

On October 21, Trump announced plans for Trump Media and Technology Group, a company with a yet-to-launch social-media site. He said it would go public via a merger with Digital World Acquisition Corp., a special purpose acquisition company, or SPAC.

Digital World had gone public in September. The news that Trump would be involved with the company sent its stock into the stratosphere. But the rally was short-lived, with the stock slipping early this week before trading mostly sideways into the weekend.

The timing of the first conversations between Trump and Patrick Orlando, the SPAC's chief executive and chairman, are of interest. This is because of securities laws that prohibit conversations between SPACs and merger partners before public listings, the Times reported on Friday.

Digital World was incorporated in December 2020, and said in its May IPO prospectus that it hadn't been in "substantive" discussions with any merger targets.

"We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us," the company wrote in the S-1 filed with the US Securities and Exchange Commission.

The company said it planned to target "technology-focused companies" in the Americas.

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