Truth Social SPAC (DWAC) Misstatements
Last updated: November 21, 2025
Status: The SEC charged Digital World Acquisition Corp. (DWAC) with material misstatements related to its merger plans with Trump Media & Technology Group (TMTG). DWAC settled in 2023. Additional insider-trading charges were filed in 2023, and the SEC sued former DWAC CEO Patrick Orlando in 2024. The merger ultimately closed in March 2024, and the combined company began trading under the ticker DJT.
Summary
Digital World Acquisition Corp. (DWAC), the special purpose acquisition company formed to take Trump Media & Technology Group public, became the subject of significant federal regulatory action after investigators determined that the company made misleading statements in its SEC filings. SPACs are required to affirm that they have not engaged in pre-IPO merger discussions with potential targets. According to the SEC, DWAC failed to comply with this requirement and concealed substantive contacts with TMTG.
In July 2023, the SEC charged DWAC with violations of federal securities laws based on material misstatements and omissions. As part of a settlement, DWAC accepted a cease-and-desist order and agreed to pay an 18-million-dollar penalty if its merger with TMTG closed, which it eventually did in March 2024. In parallel, the SEC charged a former DWAC board member and several associates with insider trading. In July 2024, the Commission filed a separate civil complaint against DWAC’s former CEO, Patrick Orlando, alleging securities fraud tied to misleading filings.
The DWAC–TMTG transaction proceeded despite the overlapping enforcement actions, and the combined entity now trades publicly. This case remains a significant example of SEC scrutiny of SPAC disclosures, the risks of pre-IPO target negotiations, and the consequences of misleading investors in rapidly developing deal structures.
What Regulators Said Happened
According to the SEC’s July 2023 order, DWAC misrepresented the extent of its pre-IPO merger activity. In its filings, the company stated that it had not selected or engaged in discussions with a potential acquisition target. However, the SEC found that executives had already held substantive talks with representatives of Trump Media & Technology Group. Because SPACs are prohibited from engaging in pre-IPO merger negotiations, the omission was deemed material and misleading.
The SEC’s order concluded that DWAC violated antifraud and reporting provisions of federal securities laws. As a result, the company agreed to undertakings designed to ensure that future filings would be accurate and complete. These included compliance measures, additional disclosures, and obligations tied to the eventual closing of the business combination.
The same month, the SEC announced insider-trading charges against a former DWAC board member and several associates. The Commission alleged that the individuals used confidential merger knowledge to purchase DWAC shares before the public announcement, generating substantial profits.
The SEC emphasised in both sets of allegations that investor protection depends on transparent disclosures, especially in SPAC transactions, where early discussions with targets can materially influence market expectations and valuations.
Grand Jury Subpoenas and Early Scrutiny
Regulatory and law-enforcement scrutiny began well before the 2023 enforcement action. In June 2022, DWAC disclosed that it had received subpoenas from a federal grand jury in the Southern District of New York. The subpoenas sought information from the company and board members concerning the proposed merger with TMTG.
The grand jury activity introduced uncertainty into the timeline for the merger and raised questions about whether criminal investigations overlapped with SEC enforcement inquiries. The disclosures also attracted media attention, prompting analysts to examine DWAC’s governance, disclosure practices, and adherence to SPAC regulations.
While the federal criminal investigation did not immediately result in public charges, the subpoenas deepened concerns about the accuracy of DWAC’s statements to investors and contributed to the Commission’s heightened oversight.
SEC Case Against the Former CEO
On July 17, 2024, the SEC filed a civil complaint against Patrick Orlando, the former CEO and chair of DWAC. The complaint alleged that Orlando made materially false statements and omissions in filings relating to the absence of pre-IPO merger discussions. According to the SEC, Orlando concealed communications and intentions related to a potential transaction with TMTG, leading to misrepresentations in documents submitted to the Commission.
The complaint underscored the SEC’s position that individuals—not just corporate entities—can be held accountable for misleading filings. It also reflected the agency’s continued focus on SPAC-related misconduct, even after the underlying merger had closed.
The action against Orlando remains significant because it highlights the personal exposure executives face when they certify disclosures that omit material information. It also reinforced concerns about conflicts of interest within SPAC leadership and the need for independent governance.
Merger Completion and Trading as DJT
Despite the ongoing legal challenges, DWAC shareholders approved the business combination with Trump Media & Technology Group in early 2024. Nasdaq issued a corporate actions notice confirming that, effective March 26, 2024, the merged entity would begin trading under the ticker symbols DJT (common stock) and DJTWW (warrants).
News coverage described intense trading activity and volatile price movements as the stock debuted. Investor enthusiasm, political attention, and the unusual regulatory backdrop contributed to swings in market value during the early days of trading.
The completion of the merger triggered the financial penalty described in the 2023 SEC settlement. With the deal closed, DWAC became liable for the 18-million-dollar payment to the Commission.
Why the Case Matters
This case illustrates the high compliance risks inherent in SPAC transactions. Unlike traditional IPOs, SPACs must affirm that they have not conducted pre-IPO negotiations with acquisition targets. Even preliminary or informal discussions can trigger regulatory consequences if they contradict statements made to investors.
The allegations in the DWAC matter demonstrate how failing to disclose these contacts can mislead shareholders about the risks and likelihood of a successful combination. The case also highlights the SEC’s increasing scrutiny of SPAC structures, the role of insider trading during merger speculation, and the challenges of policing disclosure accuracy in rapidly evolving financial markets.
For market participants, the DWAC enforcement actions reinforce several principles: transparency in filings is essential; insider-trading risks increase during pre-announcement periods; and executives personally face consequences when disclosures are false or incomplete.
Key Takeaways
SEC settlement (2023): DWAC accepted a cease-and-desist order and agreed to an 18-million-dollar penalty contingent on merger completion.
Insider-trading charges (2023): The SEC charged a former board member and others with trading ahead of the merger announcement.
CEO complaint (2024): The SEC sued former CEO Patrick Orlando for misleading and incomplete filings about pre-IPO merger discussions.
Deal status (2024): The merger closed in March 2024, and the combined company began trading as DJT.
Sources
SEC – “SEC Charges Digital World SPAC for Material Misrepresentations” (July 20, 2023)
SEC Administrative Order – In the Matter of Digital World Acquisition Corp.
SEC – “Former DWAC Board Member and Others Charged for Insider Trading” (June 29, 2023)
Reuters – Grand jury subpoenas disclosed (June 27, 2022)
SEC v. Patrick Orlando – Complaint (July 17, 2024)
Reuters – SEC sues former DWAC CEO (July 17, 2024)
Reuters – Merger completion and trading (March 25, 2024)