Multiple Truth Social Investors ARRESTED For Insider Trading

Three investors into the company trying to buy the Trump Media & Technology Group (that owns Truth Social) have been arrested for insider trading. According to the indictment, the three men invested millions into Digital World Acquisition after being told by insiders that one of their potential investment targets was going to be the Trump property. This could easily spell doom for Trump's struggling media business, as Farron Cousins explains.

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*This transcript was auto-generated. Please excuse any typos.

Well, folks, things are not looking good at all for the merger between Digital World Acquisition and the Trump Media and Technology company, which of course owns Truth Social. On Thursday, it was revealed that three individuals with digital world acquisition had been indicted. They were arrested for insider trading. The very thing that the Securities and Exchange Commission had suspected all along. Here's what happened. For anybody that's not familiar with it, this is a story that has been ongoing for well over a year. But basically investigators at the S E C were looking into whether or not there was any kind of collusion between digital world acquisition, the special, uh, spac, you know, whatever that those letters stand for. Um, and Trump Media and Technology, which again owns truth social. Now, under the rules for a spac, when you bring in investors, the investors have to come in and put their money in.

And once all the money is in and everything's closed, at that point, you determine what company you are going to target. You cannot, under any circumstances, legally have a target before you have all of the money. Now, seems weird, maybe, I guess, I don't know. Not a big finance guy, but those are the rules. And so, according to the arrest of these three individuals, they had been fed information suggesting that the target of the SPAC Digital World acquisition was in fact Trump media and technology. And they invested millions and made millions more. Let me read this from the Associated Press about what happened. According to the indictment pertaining to the media company, the men were invited to invest in the Special Purpose Acquisition Company, spac, that's what it stands for, digital World Acquisition. And were provided confidential information that a potential target of D W A C and, uh, another acquisition company, uh, Ben Capital Acquisition Corps was Trump Media and technology authorities said the defendants bought millions of dollars of D w AAC securities on the open market before news of the Trump media business was made public.

After the public announcement, the men dumped their securities for a significant profit according to the court papers. So they were told information that should not have been revealed to the public. So they dumped tons of money into Digital World. As soon as it's announced, everybody starts buying, they start selling. They made, I think, uh, according to this 22 million based on that insider information. So what happens to Trump media and technology? What happens to the potential merger with Digital World that has to be completed by September or that opportunity goes away? Well, according to these indictments, no wrongdoing whatsoever is being accused on the part of Donald Trump or Trump media and technology, okay? They are not accused of any of this wrongdoing as of right now with regard to these three men that were arrested.

However, the indictment said that between June, 2021 and November, 2021, the men purchased securities including warrants of their own and shared the secrets with their friends and employees who also bought tens of thousands of units of securities ahead of the merger. OU announcement with Trump Media and Technology Group, typically a special purpose acquisition company or SPAC is formed with the intent to merge with a private company before the private company becomes publicly traded. In early 2021, representatives of Trump media, including Trump, began communicating with principles of Ben Vanessa Re about potentially merging to take Trump Media public. The indictment said between March and June, 2021, the Trump media and Benezra entered into non-binding letters of intent to merge. One of the men was given a seat as one of the men that was arrested was given a seat on Digital World Acquisition Co, uh, core's board of directors, and had access to confidential information.

It said he then shared that information with, of course, his co-conspirators. So that's what's happening. And because he was a part of Digital World, not just an outside investor, he was giving a given a seat on the board when this happened. This may mean that the entire merger deal could be dead.