The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Patrick Orlando, the former CEO of Digital World Acquisition Corp (DWAC), accusing him of securities fraud. This blank-check company was instrumental in merging with Trump Media & Technology Group Corp, the entity behind former President Donald Trump’s social media platform, Truth Social.
Orlando is alleged to have misled investors by falsely stating in public filings that his company had not engaged in discussions with any potential merger targets and had no specific merger plans. The SEC contends that Orlando was aware these statements were false, as he had been in extensive talks with Trump Media representatives and had been targeting the company for acquisition “for months” prior to DWAC's initial public offering (IPO).
In addition to the charges of these false claims, the SEC's lawsuit filed in the District of Columbia accuses Orlando of failing to disclose the pre-IPO merger plans with Trump Media, thus violating federal securities laws. The SEC is seeking to recover all 'ill-gotten gains' from Orlando, in addition to imposing civil penalties and a permanent injunction to prevent him from engaging in future fraudulent activity and misconduct.
This legal action follows a previous settlement in July, where DWAC agreed to a cease-and-desist order and an $18 million penalty if it completed the merger. Despite these regulatory issues, the merger was finalized in March, enabling Trump Media to publicly be traded on the Nasdaq under the ticker DJT.
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