The Securities and Exchange Commission (SEC) is suing Patrick Orlando, former CEO and Chairman of Digital World Acquisition Corp (DWAC).

On July 17, 2024, the SEC filed a complaint against Orlando at the District Of Columbia District Court.

This case involves allegedly fraudulent conduct and materially false and misleading statements and omissions made by Patrick Orlando, in his capacity as the Chief Executive Officer (CEO) and Chairman of Digital World Acquisition Corp. (DWAC), in filings made with the Commission.

The SEC alleges that, through these publicly available filings, Orlando falsely represented that DWAC, a special purpose acquisition company (SPAC) that he controlled, did not intend to merge with any specific company and, indeed, had had no discussions or contacts with any potential merger targets. Orlando knew these statements were false because he had personally engaged in numerous lengthy discussions with representatives of Trump Media & Technology Group Corp. (TMTG), a social media company, and because he had targeted TMTG for merger with DWAC for months.

In February 2021, Orlando and others who later became involved with DWAC began extensive merger discussions with TMTG. Orlando initially pursued these discussions with TMTG on behalf of SPAC A, another SPAC he controlled.

In the spring of 2021, Orlando planned and executed a scheme to use DWAC, which had not yet had its IPO, to pursue a merger with TMTG. Orlando discussed his scheme with at least one individual at TMTG.

On September 8, 2021, DWAC completed an IPO, pursuant to which the company raised $287.5 million from the investing public. In support of its IPO, DWAC filed an amended Form S-1 with the Commission on or about August 31, 2021 (the “Final Form S-1”). Orlando signed the Final Form S-1.

In October 2021, DWAC announced an agreement to merge with TMTG. Following the disclosure of the planned merger and its target, the price of DWAC stock rose over 400% in a single day of trading.

On May 16, 2022, Orlando signed, and DWAC filed, a Form S-4 regarding its planned merger with TMTG that continued to misrepresent the nature of the negotiations between DWAC and TMTG and to omit material facts.

On July 20, 2023, the Commission instituted a settled cease-and-desist proceeding against DWAC, finding that DWAC violated Section 17(a)(2) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5(b) thereunder and, in addition to other remedies, imposing an $18 million civil penalty. On November 13, 2023, DWAC filed an amended Form S-4 that made disclosures consistent with the findings in the Commission’s published order instituting the settled cease- and-desist proceeding.

DWAC closed its merger with TMTG on March 25, 2024. The surviving entity renamed itself “Trump Media & Technology Group Corp.” and now trades under the ticker symbol “DJT.”

The SEC accuses Orlando of violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].

The Commission seeks a permanent injunction against the defendant that enjoins him from engaging in the transactions, acts, practices, and courses of business alleged in the Complaint, disgorgement of all ill-gotten gains from the unlawful conduct, together with prejudgment interest, civil penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)], an officer and director bar pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)].