SEC chair draws mounting scrutiny from Republicans over Truth Social merger

The Trump Media & Technology Group and Digital World Acquisition Corp have for years attempted to merge so as to raise vital capital to finance the expansion of Truth Social, Trump's social media platform.

Published: September 13, 2023 6:44pm

Updated: September 13, 2023 6:47pm

Republicans are increasingly wary of Securities and Exchange Commission (SEC) Chairman Gary Gensler's stewardship of the regulatory agency amid mounting scrutiny of his handling of a proposed merger between Donald Trump's social media company and Digital World for IPO purposes.

The Trump Media & Technology Group and Digital World Acquisition Corp have for years attempted to merge in order to raise capital to finance the expansion of Truth Social, Trump's social media platform. The SEC has long delayed the merger amid scrutiny of Digital World.

Gensler's handling of the matter, and his penchant for hiring former Democratic operatives to staff the SEC, has Republicans increasingly concerned that the agency may be acting in a less than unbiased manner. During a Senate hearing on Tuesday, Ohio Republican Sen. J.D. Vance called attention to Gensler serving as CFO for the Clinton campaign in 2016. He also pointed to current Enforcement Director Gurbir Grewal, who was previously the Democratic attorney general of New Jersey.

He also highlighted SEC General Counsel Megan Barbero, who was previously the associate and later deputy general counsel for the U.S. House under then-Speaker Nancy Pelosi. Vance went on to note that Associate Enforcement Director Melissa Hodgman is the wife of Peter Strzok, a former FBI agent who was removed from special counsel Robert Mueller's investigation following the release of text messages showing he had criticized Trump.

"You seem to have a very troubling pattern of hiring, at an impartial regulatory agency, a lot of people who seem to have a vendetta against the former president, and I fear and I worry that that has implicated itself and affected the policy of the SEC," Vance told Gensler.

"When did the SEC take its first enforcement action against a SPAC?" Vance also asked. Gensler did not know. Vance contended that "September of 2021 is the first time that you guys at the SEC launched an enforcement action against a SPAC."

"First, you were Clinton's finance director in 2016... Second, you hired anti-Trump Enforcement Director Grewal in July of 2021. Third, you brought in Ms. Barbero who was the litigator on two House impeachment trials against Donald Trump. You have another enforcement counsel who is married to Peter Strzok," Vance recounted. "In November of 2021, Sen. [Elizabeth] Warren [D-Mass.] urged you to investigate the SPAC merger involving Donald Trump's Truth Social company and in December of 2021, just a few weeks later, you guys launched an investigation using a novel legal theory against the former president's social media company. That is some coincidence. Isn't it, Mr. Gensler?"

"You can make a pretty good argument that the SEC was using its enforcement powers to silence the chief political rival of the current president," Vance asserted. "It looks more and more like not an impartial regulatory body protecting investors and consumers but a regulatory body that is using its power to silence and immiserate political rivals of the current president of the United States."

Gensler denied speaking to the White House about its investigation. Vance, however, warned that any political weaponization of the agency would turn around to bite Gensler and his associates eventually.

"If you guys use the SEC in such a politically motivated way, eventually you're gonna be out of power, and I have to say Chairman Gensler, turnabout is fair play," he concluded.

Vance is not alone in scrutinizing Gensler, however. Appearing on the "Just the News, No Noise" television show Wednesday, Pennsylvania GOP Rep. Dan Meuser opined that "everything that Gary Gensler seems to do, at the SEC is of great concern... is just another big piece of the puzzle of they're acting in a highly biased manner."

"[Y]ou know the story, but Truth Social trying to go public issues the S-4, normally they take about 100 days," Meuser went on. "And meanwhile, the S-4 now is nearly passed for the Truth Social, for the merger to take place and to go public, over 500 days."

Meuser then echoed Vance's concerns, highlighting Gensler's past partisan activities.

"[Y]ou got a guy like Gary Gensler, he was the CFO for Hillary Clinton," Meuser noted. "He's actually the person who wrote the check for the phony Steele Dossier. And yet, he's our SEC chairman, and overseeing something that, you know, in their view would benefit Donald Trump, but meanwhile, it would benefit millions, literally millions of American investors, more so."

"But they don't care about that. They ... just do things in a manner that that, frankly, is in their ideological – within their ideology as well. It's in their political best interests," he concluded.

Truth Social and Digital World in early August agreed to extend the deadline for their merger to Dec. 31, 2023, amid the longstanding delays.

Ben Whedon is an editor and reporter for Just the News. Follow him on X, the social media platform formerly known as Twitter.

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