Trump Media Stock Alert: SEC sues former Digital World CEO Patrick Orlando

Former CEO of Digital World Acquisition Patrick Orlando is under pressure after the US Securities and Exchange Commission (SEC) sued him for making false and misleading statements during his time as CEO of the company. Digital World was the special purpose acquisition company (SPAC) that Trump Media and Technology Group (NASDAQ:DJT) in March.

The SEC alleged that Orlando misled investors by failing to disclose that Digital World had plans to acquire TMTG before DWAC went public. He implied in public filings that Digital World had no goals in mind and had not discussed a SPAC merger with any company.

“Orlando knew these statements were false because he had personally had numerous lengthy conversations with representatives of Trump Media & Technology Group, a social media company, and because he had been targeting TMTG for a merger with DWAC for months,” the complaint states.

Trump Media Stock: SEC sues former Digital World CEO Patrick Orlando

Last year, Digital World agreed to settle for the same situation Orlando is currently facing. The SEC accused the company of violating anti-fraud provisions of the federal securities laws by failing to disclose to investors that it had already prepared a merger plan with TMTG before DWAC went public. Digital World agreed to a cease-and-desist order and an $18 million fine after the TMTG merger was completed. The settlement came after an SEC investigation that began in 2021.

But wait, there’s more. Earlier this year, the SEC filed charges against TMTG’s auditor, BF Borgers CPA, and its owner, Benjamin Borgers, for failing to comply with Public Company Accounting Oversight Board (PCAOB) standards.

The SEC called the company a “sham audit factory” that failed to conduct proper audits and reviews on more than 1,500 SEC filings between January 2021 and June 2023. BF agreed to pay a $12 million fine, while Borgers agreed to a $2 million fine.

DJT stock is barely reacting to the news and is actually trading higher today. The company has made generous gains this year as former President Donald Trump’s chances of winning the presidential election have increased.

At the time of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com Publishing guidelines.

At the time of publication, the responsible editor had no (direct or indirect) positions in the securities mentioned in this article..