© Reuters. FILE PHOTO: The US Securities and Exchange Commission logo adorns an office door at SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst/File Photo
(Reuters) – A blank check company, which was to be merged with a media company affiliated with former US President Donald Trump and is subject to regulatory investigations, reached an agreement with Securities and Exchange Commission employees, a filing showed on Monday.
The SPAC, Digital World Acquisition Corp., said in the filing that the agreement was in principle and not yet final, and that the terms were subject to SEC approval.
In October 2021, Trump’s newly created Trump Media & Technology Corporation (TMTG) announced a deal to go public by merging with DWAC. But the SPAC deal was thrown into doubt after the Justice Department and the Securities and Exchange Commission said they were investigating.
If the SEC approves the settlement, it will enter a cease and desist order to find that DWAC has violated certain anti-fraud provisions in connection with the proposed merger.
DWAC said in the lawsuit that failure to settle with the SEC would create a “significant risk of prolonged litigation” and could impede the company’s ability to merge with TMTG or any other target.
While the Trump Media Company is not a party to the settlement or any negotiations, DWAC cannot settle without the company’s written consent either, it said.