WASHINGTON (Reuters) -The U.S. Securities and Exchange Commission said on Thursday that Digital World Acquisition Corporation, a special purpose acquisition company that plans to merge with the parent company of Donald Trump’s Truth Social platform, settled charges that it made “material misrepresentations” to investors.
DWAC, which was found to have violated antifraud provisions of federal securities laws, agreed to a cease-and-desist order and to pay an $18 million penalty in the event it closes a merger transaction, the SEC said.
The SEC said DWAC misled investors by failing to disclose in filings that it had formulated a plan to acquire Trump Media & Technology Group Corp and was pursuing the acquisition before DWAC’s IPO.
DWAC did not immediately respond to an emailed request for comment.
SPACs are listed shell companies that raise cash to acquire and take public a private company,…
