Trump's Truth Social asks Congress to probe SEC delays, conflicts of interest during merger review

Trump Media and Technology Group calls out Securities and Exchange Commission, suggesting it has engaged in censorship and politicization.

Published: February 27, 2023 4:52pm

Updated: February 27, 2023 11:37pm

The parent company for former President Donald Trump's Truth Social platform is asking Congress to investigate the Securities and Exchange Commission, alleging regulators there have engaged in "egregious conduct and blatant politicization" to delay the social media platform's potential merger with an acquisition firm.

The SEC has been reviewing the so-called S4 plan submitted in fall 2021 by Digital World Acquisition Corp. (DWAC) to merge with Trump Media & Technology Group, which owns the Truth Social platform that now boasts millions of users and has become a potent alternative for conservatives to traditional social media platforms like Twitter and Facebook.

DWAC is a special purpose acquisition company (SPAC) that raised millions of dollars from investors who have been in limbo for 18 months as the SEC review has dragged on, a delay the Trump firm's top lawyer says is unwarranted.

"America's cherished free speech tradition is under unprecedented attack by Big Tech companies working hand-in-glove with censorious government agencies, powerful media outlets and well-connected political operatives," Scott Glabe, the general counsel at Trump Media & Technology, wrote in a letter to the powerful Republican chairmen of the House Judiciary, Oversight and Financial Service Committees.

Glabe asked Reps. Jim Jordan, R-Ohio, James Comer, R-Ky., and Patrick McHenry, R-N.C., not only to investigate the delays in approval but also what he alleged were "multiple severe conflicts of interest" among the key regulators. 

"I write to request your urgent assistance in investigating egregious conduct and blatant politicization of the Securities and Exchange Commission," he wrote

Glabe noted, for instance, that SEC Chairman Gary Gensler previously worked for Trump's 2016 Democratic election opponent as the chief financial officer for Hillary Clinton's campaign.

He also noted that the SEC's acting enforcement chief when the DWAC review began was Melissa Hodgman, who is married to fired FBI agent Peter Strzok, who oversaw the widely discredited probe into alleged but non-existent collusion between Trump's campaign and Russia during the 2016 election.

"The facts set forth above cannot be squared with the requirement that SEC proceedings be so completely devoid of bias — or the appearance of bias — that every step of the process is vested with 'the very appearance of complete fairness,'" Glabe wrote the lawmakers in a letter obtained by Just the News. "It is therefore deeply alarming that SEC has refused to reveal whether Chairman Gensler and Associate Director Hodgman have recused themselves from matters related to TMTG."

The SEC did not immediately respond to a request for comment on behalf of Gensler and Hodgman.

Glabe wrote that Trump's firm has cooperated with the SEC and repeatedly asked for an explanation for the months-long delay in the S4 merger review, which is now about to become the longest-delayed of the 100 SPAC reviews over the last year.

"On June 21, 2022, SEC staff member Joshua Shainess informed DWAC's counsel that the Division of Corporation Finance had 'indefinitely suspended' its review of the S-4, without citing any valid legal basis for such suspension," he wrote. "SEC thus failed to provide comments on the S-4 within the customary 30 days. As of today, SEC has still failed to provide substantive feedback on DWAC's S-4 — which was filed more than nine months ago.

"The S-4 will soon have lingered for longer than the time between SEC filing and SEC effectiveness for any of the 100+ SPAC transactions that closed in 2022." 

The SEC's delayed merger review has harmed both efforts to grow a free-speech alternative in the Big Tech marketplace and investors' opportunity to grow shareholder value, Glabe wrote the committee chairman.

"The obvious bias of SEC leadership irrevocably taints the agency's ability to conduct an impartial inquiry," he argued "We therefore seek immediate congressional action to investigate these abuses, ensure documents are preserved, and uphold the rule of law."

Truth Social launched early last year as a censorship-free alternative to Twitter and Facebook, gaining approval for its app in the Apple and Google Android stores and amassing millions of users. It has flexed its muscle several times, including helping country star John Rich take his song "Progress" to No. 1 on the download charts while bypassing traditional music industry channels.

It has also been steadily adding features like an Instagram-like content-recommendation bar, direct messaging and soon-to-be released communities and video offerings. 

Getting inside the Google Play and Samsung store were major milestones, Trump Media & Technology CEO Devin Nunes recently told Just the News.

"It took us a while to get here," Nunes said during an interview on the John Solomon Reports podcast. "But we're glad to be here. So we're hopeful now that everyone who has an Android can either go to the Google Play Store or the Samsung Galaxy Store and download the app."

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