While all eyes have been on the lawsuits piling up against Donald Trump, the swamp’s efforts to target his business empire haven’t attracted nearly as much attention.
Since October of 2021, Donald Trump has been trying to bring his Twitter competitor “Truth Social” public by merging it with an already publicly-traded “special purpose acquisition company” (SPAC) - a process that can usually be completed in a few as three to four months after an intent to merge is announced. The deal would provide Truth Social with $1.25 billion in financing once completed, which investors have been waiting nearly two years for due to the SEC aggressively investigating Truth Social to an unprecedented extent relative to other SPACs.
In this case, a SPAC called Digital World Acquisition Company (which trades under the ticker “DWAC”) has been under heavy fire from the SEC right after it announced its intent to bring Truth Social public. Just three weeks after Elizabeth Warren said that DWAC “may have committed securities violations by holding private and undisclosed discussions about the merger as early as May 2021, while omitting this information in [SEC] filing and other public statements,” the SEC announced an investigation.
Fast forward to June 2023, and the SEC alleged that DWAC violated anti-fraud laws by failing to disclose to investors it was actively pursuing a merger with Truth Social before it went public, allowing three investors to allegedly profit from insider trading. None of the three men were associated with Trump, and no wrongdoing was alleged against the Trump family or Truth Social’s CEO Deivn Nunes. Less than a month later, DWAC settled fraud charges with the SEC, part of which includes an additional $18 million “civil penalty fee” if Truth Social is ever successfully brought public, an additional spit in the face from the SEC after delaying their merger for nearly two years.
There’s nothing wrong with the SEC investigating SPACs, but as JD Vance pointed out to SEC Chairman Gary Gensler during a recent hearing, it sure looks targeted in this case.
Vance: Chairman Gensler, when did the SEC first take an enforcement action against a SPAC? Do you know the exact time?
Gensler: Senator I would have to get back to you, I don’t know what decade that was.
Vance: So according to my staff’s research, September of 2021 is the first time you guys at the SEC launched an enforcement action against a SPAC. So, I want to recap just a few things and then ask a question….. In November of 2021, Senator Warren 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?
Gensler: Senator it is good to meet you in person, but I think you’re not correct.
Vance: What was I not correct about?
Gensler: We, uh, follow the facts and the law wherever the are. And in regard to the SPAC field, there have been abuses as you’ve mentioned… and there are times that we open investigations.
Vance: The problem that I have, Chairman Gensler, is not with you investigating SPAC mergers. The problem is investigating a SPAC merger using a novel legal theory against your boss Joe Biden’s chief political rival. Also against a social media company, which of course at the time, Twitter and Facebook and every social media company had banned the former president. So you could make a pretty good argument that the SEC was using its enforcement powers to silence the chief political rival of the current president.
Now, let me just offer another another observation here. We are rightfully concerned in this chamber, at least on my side of the aisle, about the weaponization of the Department of Justice. But I’m increasingly worried that we should be more worried about the weaponization of the Securities and Exchange Commission. 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.”
Vance also made reference to the leadership of the SEC, which is packed with individuals who have targeted Trump in the past.
The SEC is chaired by the aforementioned Gensler, who assumed the position in April 2021 after being nominated by Biden. Former Hillary Clinton campaign chairman/art collector John Podesta testified that Gensler was the campaign’s primary money handler in connection with Perkins Coie, which the campaign used to funnel payments for the fictitious “Steele dossier,” which was eventually used to justify surveillance of the 2016 Trump campaign.
The acting director of the SEC is Melissa Hodgman, who assumed the position on Biden’s third day in office. Hodgman is married to Peter Strzok, the ex-FBI agent infamous for his texts about an “insurance policy” ahead of the 2016 election with his paramour Lisa Page.
The SEC’s Director of the Division of Enforcement is Gurbir Grewal. Grewal previously was Attorney General of New Jersey, where he launched or was involved in dozens of lawsuits against Trump and members of his administration. As one New Jersey publication headlined an article profiling Gewwal: “Here's the top NJ prosecutor leading the fight against Trump, one lawsuit at a time.”
Meanwhile, the SEC’s General Counsel is Megan Barbero, who was previously a lawyer for House Democrats for both Trump impeachments.
It certainly looks like the SEC is targeting Trump - but we won’t know for sure until the media brands that observation a “conspiracy theory.”
Matt Palumbo is the author of Fact-Checking the Fact-Checkers: How the Left Hijacked and Weaponized the Fact-Checking Industry and The Man Behind the Curtain: Inside the Secret Network of George Soros
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