Patrick Orlando, the former CEO of Digital World Acquisition Corp. (DWAC), is facing a lawsuit from the Securities and Exchange Commission (SEC).
According to Business Insider, the SEC has sued Patrick Orlando, the former CEO of the SPAC, who facilitated the public listing of Donald Trump's media company, for allegedly misrepresenting the SPAC's negotiations with Trump Media.
The SEC alleges that Orlando misrepresented negotiations between his SPAC and Trump Media & Technology Group (TMTG). The lawsuit seeks to prevent further misconduct and impose financial penalties.
Orlando, who served as chairman and CEO of DWAC, is accused of falsely claiming that DWAC was not planning to merge with a specific target. In reality, Orlando had multiple discussions with TMTG, the parent company of Truth Social, a social media platform similar to Twitter.
The SEC's complaint highlights that Orlando falsely represented the status of DWAC's negotiations with TMTG. Despite his claims, Orlando had been involved in extensive talks with Trump Media. The SEC imposed an $18 million civil penalty on DWAC in July 2023 for this misrepresentation.
TMTG's stock has shown significant volatility since its public debut earlier this year. Neither Orlando's legal representatives, DWAC, nor TMTG responded to requests for comment made by Business Insider.
The SEC is determined to prevent Orlando from engaging in similar conduct in the future. The suit seeks the disgorgement of all ill-gotten gains, prejudgment interest, and additional civil penalties. This marks another instance of SEC action against entities linked to Trump Media.
In May, the SEC charged TMTG's former auditor with massive fraud. At that time, a TMTG spokesperson indicated that the company was looking forward to collaborating with new auditing partners.
In addition to the recent lawsuit against Orlando, the SEC has been actively investigating various aspects of TMTG's business operations. This includes the significant penalty levied against DWAC for misrepresentation. The SEC's actions underscore its commitment to maintaining transparency and accountability in public markets.
TMTG, which operates Truth Social, has been navigating a turbulent stock performance since going public. The company's shares have experienced considerable fluctuations, reflecting investor uncertainty and market volatility.
The SEC's lawsuit against Patrick Orlando represents a significant development in its ongoing efforts to regulate SPAC transactions and ensure market integrity. The allegations of misrepresentation against Orlando highlight the importance of transparency in financial dealings. As the legal process progresses, both Orlando and TMTG will face scrutiny regarding their business practices and financial disclosures.
Orlando's legal team, DWAC, and TMTG remain silent on the matter, leaving many questions unanswered. The SEC's pursuit of financial penalties and preventative measures underscores its dedication to enforcing securities laws. The broader implications for the industry and other SPACs engaged in similar activities will be closely monitored.
The SEC's actions against Orlando and TMTG's former auditor demonstrate a broader regulatory focus on entities associated with Trump Media. As TMTG navigates these challenges, its future strategy and market performance will be critical areas of interest for investors and regulators alike.
