Former Digital World Acquisition CEO Patrick Orlando is facing the heat after the U.S. Securities and Exchange Commission (SEC) sued him for issuing false and misleading statements while he led the company. Digital World was the special purpose acquisition company (SPAC) that merged with Trump Media & Technology Group (NASDAQ:DJT) back in March.
The SEC alleged that Orlando misled investors by failing to disclose that Digital World already had a plan to acquire TMTG before the DWAC IPO. Through public filings, he conveyed that Digital World had no targets in mind and had not discussed a SPAC merger with any company.
“Orlando knew these statements were false because he had personally engaged in numerous lengthy discussions with representatives of Trump Media & Technology Group, a social media company, and because he had targeted TMTG for merger with DWAC for months,” read the complaint.
Trump Media Stock: SEC Sues Former Digital World CEO Patrick Orlando
Last year, Digital World agreed to settle for the same situation that Orlando is currently facing. The SEC accused the company of violating antifraud provisions of federal securities laws because it did not disclose to investors that it had already created a plan with TMTG for a merger before the DWAC IPO. Digital World agreed to a cease-and-desist order and a $18 million fine upon the closing of the TMTG merger. The settlement came following a SEC probe that began in 2021.
But wait, there’s more. Earlier this year, the SEC charged TMTG’s auditor, BF Borgers CPA, and its owner, Benjamin Borgers, with failing to comply with Public Company Accounting Oversight Board (PCAOB) standards.
The SEC characterized the firm as a “sham audit mill” that failed to conduct legitimate audits and reviews for more than 1,500 SEC filings between January 2021 and June 2023. BF agreed to pay a $12 million fine while Borgers agreed to a $2 million fine.
DJT stock isn’t reacting much to the news and is actually trading higher today. The company has enjoyed generous gains this year as former President Donald Trump’s odds of winning the presidential election have increased.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
