Trump’s Media Business Contends With Erroneous Accounting, Bad Press
Today we examine the continuing turmoil at the Trump Media & Technology Group.
Trump’s SPAC Says Its Financial Statements Through 2022 ‘Should No Longer Be Relied Upon’
The company planning to merge with Trump Media & Technology Group informed the Securities and Exchange Commission on Wednesday that its financial statements through 2022 should not be relied upon due to an error “accounting for certain expenses.” Digital World Acquisition Corp. also revealed that, for the second time, it is at risk of being delisted from NASDAQ for failing to file a mandatory report.
Digital World’s management, audit committee and advisors concluded on May 18 that the error mandated reissuing the company’s audited financial statements included in its 2022 annual report, according to the filing. The mistake is indicative of “a material weakness” in the company’s “internal control over financial reporting,” and “the company’s disclosure controls and procedures were not effective as of December 31, 2022,” the disclosure says. Digital World plans to reissue those financial statements and says it also will share a plan to address the issues.
In regard to the potential NASDAQ delisting, Digital World says it has until July 24 to submit a plan to regain compliance that, if approved, would allow it six months to get back in the exchange’s good graces.
In this photo illustration, the holding screen for the Donald Trump’s Truth Social platform and app is seen on Jan. 04, 2022 in London, England. (Photo illustration by Leon Neal/Getty Images) Getty Images
In October 2021, Digital World, a publicly traded SPAC, announced plans to merge with the former president’s Trump Media & Technology Group, which owns Truth Social. Eighteen months later, the deal remains in limbo.
Digital World disclosed in December 2021 that the SEC and the Financial Industry Regulatory Authority are investigating the venture, looking into stock trades and communications. The following June, Digital World revealed that the Department of Justice had launched its own inquiry and that a federal grand jury had issued subpoenas to members of the company’s board of directors.
In March, the company announced that it sacked its CEO, Patrick Orlando. On Saturday, Trump Media sued the Washington Post for $3.8 billion, claiming an article about the proposed merger falsely accused the company of securities fraud.
Spokespeople for Digital World and Trump Media did not immediately respond to requests for comment. Trump Media accused the SEC of “inexcusable obstruction” and threatened to sue the agency in September 2022.
Digital World Acquisition Corp. informed the SEC on Wednesday that an error in its “accounting for certain expenses” meant its financial statements for 2022 “should no longer be relied upon.”
Securities and Exchange Commission/Digital World Acquisition Corp.
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Trump’s Social-Media Business Sues Washington Post, Seeking $3.8 Billion In Damages
Donald Trump’s social-media company filed a $3.8 billion defamation lawsuit against the Washington Post on Saturday, claiming an article falsely accused the company of securities fraud.
The article, headlined “Trust linked to porn-friendly bank could gain a stake in Trump’s Truth Social,” came out earlier this month and reported that a murky entity could gain a sizable stake in Trump’s business. The Post also reported on a $240,000 finder’s fee, which Trump’s business now says it never paid.
Attorneys for Trump Media called the report “an egregious hit piece that falsely accused TMTG of securities fraud and other wrongdoing” in a lawsuit filed in Sarasota County, Florida. The former president’s company is seeking $2.8 billion in compensatory damages and $1 billion in punitive ones, claiming the article exposed Trump Media to “public ridicule, contempt and distrust,” in addition to wiping out $2.78 billion of implied equity value.
A spokesperson for the Post declined to comment, citing the pending litigation.
This filing is the latest in about 25 recent civil lawsuits that involve Trump, either as plaintiff or defendant. He’s also fighting criminal charges in New York City and is the subject of several federal, state and local investigations.
Two of those inquiries focus on Trump Media’s planned merger with Digital World. The Justice Department and the SEC are looking into stock trades and communications surrounding the proposed consolidation, according to disclosures Digital World filed.
Trump Media called the SEC’s failure to approve the merger “inexcusable obstruction” and threatened to sue the agency in a statement accompanying another Digital World filing.
Watch: Your correspondent joined Brittany Lewis in “Forbes Newsroom” to discuss Trump Media’s lawsuit.
Rep. Timmons Lays Out ‘Incredibly Damning’ Evidence Against Hunter Biden And Biden Family
Rep. William Timmons (R-S.C.) joins “Forbes Newsroom” to lay out his “incredibly damning” case against Hunter Biden and the Biden family.
Forbes continues to update “Tracking Trump: The Lawsuits And Investigations Involving The Former President.”
“Former President Donald Trump blasted the timing of his looming trial in Manhattan Criminal Court as ‘election interference’ Tuesday, hours after a judge set a March start date that coincides with critical early Republican primary contests, bolstering Trump’s strategy of casting his various legal woes as political attacks and capitalizing on them to fundraise and build support,” reports Sara Dorn.
This weekend, a golf tournament backed by Saudi Arabia will take place at a club owned by the current front-runner for the 2024 GOP presidential nomination.
On Wednesday, Digital World Acquisition Corp., a SPAC that plans to merge with Trump’s media company, informed the Securities and Exchange Commission that its financial statements through 2022 “should no longer be relied upon.”
It’s been a tumultuous 18 months since the merger was first announced. Which of the following has not happened to Digital World?
A. The Justice Department launched an investigation into it.
B. The SEC launched an investigation into it.
C. It fired its CEO.
D. The New York attorney general charged it in civil court with overestimating the value of its assets.
Check if you got it right here.