Patrick Orlando, the former chief executive officer of Digital World Acquisition (DWAC), is being sued by federal regulators for lying about the company’s intentions to merge with Trump Media & Technology Group.
DWAC is what’s known as a special acquisition company, or SPAC. These are vehicles that exist solely to acquire private companies and take them public on the stock market. DWAC merged with Trump Media — the company behind former president Donald Trump’s right-wing social media site, Truth Social — in March to take it public.
Through publicly available filings, however, the Securities and Exchange Commission found that Orlando allegedly lied about DWAC’s intentions to merge with Trump Media. According to a lawsuit filed Wednesday in by the regulator, Orlando claimed that the company hadn’t had any discussions or contacts with potential merger targets prior to debuting on the Nasdaq in September 2021.
In reality, the SEC alleged that as CEO, Orlando had actually held “numerous lengthy discussions” with representatives of of Trump Media. Orlando had also allegedly targeted a DWAC-Trump Media merger for months in the lead-up to the initial public offering (IPO).
This included “extensive merger discussions” with Trump Media back in February 2021, and a scheme formulated months later to use DWAC to take Trump Media public. The SEC alleges that Orlando discussed these plans with at least one person at Trump Media.
“Orlando carried out this deceptive course of business as part of a scheme to allow him to reap the financial benefit of the DWAC merger and avoid opposition” from the company’s directors, the complaint alleges.
The regulator fined DWAC $18 million last July to settle similar fraud charges, after the Commission found that the company misled investors and the SEC by failing to disclose that it had planned to pursue its acquisition of Trump Media prior to its IPO.
Now, the SEC is seeking a permanent injunction against Orlando, which would bar him from carrying out any similar business, and would force him to turn over any “ill-gotten gains” from the merger.
Shares of Trump Media were up 1.26% in pre-market trading Thursday.
This isn’t the first lawsuit involving Orlando. Just days before Trump Media debuted on the Nasdaq in March, the former DWAC CEO sued his replacement, Eric Swider, over an alleged “coup d’état.” He claimed that Swider and Alexander Cano, president and secretary of DWAC, hacked into several of Orlando’s accounts and sent emails defaming the then-CEO in an attempt to have him ousted from the role. Swider replaced Orlando in March 2023.