A SPAC told the SEC it hadn't talked to its merger target — it had, for months

Digital World Acquisition Corp (DWAC) was a blank-check SPAC that raised money in its 2021 IPO on the premise it had not yet identified a merger target — a structure meant to let public shareholders judge the deal once one was found, rather than buy into a predetermined target dressed up as a blind pool. DWAC's amended IPO filing stated that neither the company nor its officers had held talks with potential targets before the offering.

That was false. DWAC's CEO had been in extensive discussions with Trump Media & Technology Group since as early as February 2021, months before the IPO, and had signed a letter of intent that made him personally liable for a $1 million break-up fee — a direct financial stake in the merger he was supposed to be evaluating independently. None of this was disclosed to the investors buying into the blind pool.

The SEC charged DWAC with fraud in 2023 over the false disclosures. The company settled in July 2023, agreeing to an $18 million penalty due on completion of the Trump Media merger (or by January 2025) and to cease-and-desist terms, without admitting or denying the findings. The merger closed regardless, and the combined company traded under Trump Media's ticker.