On Thursday, Axios reported that a private equity investor, Brian Shevland, is suing the CEO of the so-called "blank check company" behind former President Donald Trump's attempt to build a new social media platform — and that he is alleging a fraud scheme.
"The lawsuit comes just a week after Digital World Acquisition Corp. (DWAC), led by Patrick Orlando, disclosed that it's under investigation by federal securities regulators. It also comes several months before Trump's company is slated to launch its first public products," reported Dan Primack. "Shevland was an early director nominee of DWAC, but claims in his lawsuit that he was removed by Orlando without warning or notification — a move that denied him thousands of shares and the ability to buy more stock at a very low price."
"The complaint suggests that conversations between Orlando and Trump began months before DWAC went public, which could violate federal securities law," the report continued. "It also said that DWAC originally planned to pass on the Trump deal 'due to opposition from board members who rejected an affiliation with former President Trump for personal reasons.'"
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Trump's company, which seeks to build a right-wing social network called "Truth Social," has run into a number of controversies, including that many investors were apparently unaware of the former president's involvement at the time they were enticed to invest.
Meanwhile, "Truth Social" has missed its launch date and appears to be built on shaky technology, and many investors appear eager to cash out, which led Popular Information's Judd Legum to speculate the whole venture could be a "pump-and-dump" scheme.
You can read the complaint here.
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