Devin Nunes Joins Trump’s Shady Tech Venture, Now Under Investigation

Donald Trump’s effort to launch a MAGA-centric tech agency to rival the likes of Google and Facebook landed a new CEO on Monday. It additionally disclosed that it’s underneath investigation by the feds.

Trump Media and Technology Group (TMTG) shall be helmed by Representative Devin Nunes, a Trump sycophant whose earlier expertise within the tech world principally consists of an unsuccessful lawsuit towards Twitter over a parody account titled “Devin Nunes’s Cow.” Nunes shall be resigning from Congress to change into CEO of the corporate, which is presently merging with a particular objective acquisition firm (SPAC) named Digital World Acquisition Corp (DWAC), beginning in January 2022. It’s that deal which the feds are apparently frowning on.

As reported by the Washington Post, DWAC disclosed in a Securities & Exchange Commission filing that it had acquired separate inquiries from the Financial Industry Regulatory Authority (FINRA) and the SEC. First, DWAC admitted FINRA had despatched them “certain preliminary, fact-finding inquiries” in late October and early November, in each circumstances associated to buying and selling of the SPAC’s inventory. The SEC individually despatched DWAC inquiries asking for info on conferences by the SPAC’s board of administrators, in addition to info on buyers and firm communications.

As the Post wrote, this isn’t in and of itself essentially a conclusion that DWAC or anybody related to it has damaged the regulation. But receiving inquiries from two separate regulators is rarely nice information, and there’s a lot to point out one thing fishy is likely to be happening right here.

SPACs are mainly shell corporations set as much as merge with a non-public agency so as to fast-track the merged entity onto public markets; they’re additionally a car for the corporate in search of to go public to lure extra capital from buyers. In this case, the corporate in search of to get on the general public inventory exchanges as quick as potential is TMTG, and its companion has already been wreaking inventory market havoc. After the TMTG-DWAC merger was introduced on Oct. 20, DWAC inventory surged by greater than 800%. As the businesses supplied solely extraordinarily skinny documentation for buyers on little issues like what TMTG’s enterprise mannequin can be, the skyrocketing share worth gave the impression to be primarily based virtually totally on buzz tied to the ex-president’s identify. On Dec. 4, Bloomberg reported that DWAC/TMTG claimed to have not too long ago signed a deal to clear greater than $1 billion from unidentified buyers.

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According to TMTG promotional material, the corporate intends to create “a media powerhouse to rival the liberal media consortium and fight back against the ‘Big Tech’ companies of Silicon Valley, who have used their unilateral power to silence opposing voices in America.”

The rest of the doc is mostly a retread of conservative culture war gripes, like Trump’s Twitter ban or the need for “non-woke” entertainment. Its only solid proposal is Truth Social, a sort of Twitter/Facebook clone which might already be in violation of the license terms of its open-source codebase. Beyond that, it mentions TMTG+, an “on-demand streaming service” for which there is little evidence any work has been done yet, and a “Long-Term Opportunity TMTG Tech Stack” that will somehow pick off Amazon Web Services, Azure, Google Cloud, and Stripe. No corporate officers, employees, or operations are mentioned.

What FINRA and the SEC is likely to be on the lookout for is unclear. However, DWAC’s momentary surge in inventory worth to as high as $175 per share has since seen a large collapse to round $44 per share. The Post famous that in a letter to the SEC on Nov. 17, Sen. Elizabeth Warren expressed her concern that the corporate had no obvious enterprise mannequin and might be a pretext for the events concerned to bilk particular person buyers. The New York Times has additionally reported that DWAC chief Patrick Orlando had discussions with Trump over the TMTG deal all the way in which again in March 2021, lengthy earlier than September, when DWAC was listed on the inventory market. That might place them in violation of economic rules requiring SPACs have no specific target in thoughts on the time they elevate cash; these guidelines are (at the least in concept) meant to stop somebody from, say, utilizing an SPAC as a backdoor car to barrel a agency to the market with out all these pesky investor disclosures.

“Nobody is above the law—and there may have been serious violations of securities laws during the proposed merger of Digital World Acquisition Corp & Trump’s media company,” Warren told CNN.

Nunes told CNBC in a statement he was “humbled and honored” to head up Trump’s new venture, which follows the lead of several other MAGA-themed trainwrecks. After getting banned from virtually every major social network and leaving office, Trump launched a blog titled “From the Desk of Donald J. Trump.” He shuttered it a few weeks later after getting a humiliatingly low rate of visitors. After that, his longtime aide Jason Miller left the president’s service to helm a social media site called GETTR, a disastrously built website that itself appears to have been originally built as a vanity project for a fugitive Chinese billionaire. Miller very much appears to have been under the impression Trump would join GETTR, supercharging its user growth, but the ex-president never did. The site has since been tanking, and Trump’s team appeared to twist the knife, inserting a graphic where GETTR’s logo appeared to be superimposed over a Chinese flag into the TMTG promotional packet.

DWAC and TMTG didn’t instantly reply to a request for touch upon this story, and we’ll replace this submit if we hear again.