Employees at a Miami investment firm had learned of a pending merger deal between former President Donald Trump's social media company and a blank-check entity, long before it was announced, the New York Times has reported, citing three people familiar with the discussions.
Officials of the firm, Rocket One Capital, at the time talked about ways to profit off the soon-to-be-announced transaction with Trump Media & Technology Group by investing in the SPAC, Digital World Acquisition Corp, the NYT reported, citing two of the people.
Federal prosecutors and regulators are now investigating the merger, including the frenzied trading in the SPAC's warrants, the report said, citing people familiar with the investigation and public disclosures.
Trump Media & Technology Group, the creator of social media platform Truth Social, agreed to merge with Digital World on October 20 and the deal was expected to close by the second half of this year.
Digital World shares soared as much as 350 percent, a day after the deal was made public.
Trump Media and Rocket One Capital did not immediately respond to Reuters' requests for comment.
Truth Media has been embroiled in controversy since it was first announced. It was defaced shortly after it was announced, with the names of famous people used to create accounts.
Key executives also quit, it was threatened with legal action over the failure to follow the licence for the open-source software it's built on and it suffered from performance issues and long delays in sign-ups when it eventually launched.
It has also been criticised for banning users and deleting posts it doesn't like, despite marketing themselves as free-speech champions.
Reuters / Newshub
