Trump subpoena
Late night jokes about Trump subpoenaed by Jan. 6 committee
02:03 - Source: CNN Business
CNN  — 

A former executive at Donald Trump’s media company claims the former President retaliated against a board member who refused to give Melania Trump shares of the company, according to a report from The Washington Post.

According to the Washington Post, Will Wilkerson filed in August a whistleblower complaint with the Securities and Exchange Commission against Trump’s media venture and has also provided the SEC with a tranche of internal documents. The documents included an email, which Wilkerson also shared with the Post, in which company co-founder Andy Litinsky claims that the former president retaliated against him because he refused to gift shares to the former first lady.

The former president is the chairman and a major shareholder of TMTG, which is the parent company of social media platform Truth Social.

Litinsky, a 2004 contestant on Trump’s reality TV show “The Apprentice,” refused Trump’s demands and was removed from TMTG’s board months later, according to the Post. Wilkerson told the Post that Litinsky believes his ouster was retribution for his failure to cede his shares to Melania Trump. Litinsky did not respond to a request for comment.

Patrick Mincey, an attorney representing Wilkerson, confirmed that Wilkerson was fired on Thursday after speaking to reporters at the Post. Wilkerson is also represented by attorneys Stephen Bell and Phil Brewster.

“Trump Media’s termination of the whistleblower after the company was contacted for comment by the Washington Post is patent retaliation against a SEC whistleblower of the worst kind,” a statement Mincey, Bell and Brewster jointly said.

A spokeswoman representing TMTG disputed the facts of the Post’s story.

“The Washington Post published a story rife with knowingly false and defamatory statements and other concocted psychodramas,” she said. “We will consider republication of such statements to be legally-actionable evidence of reckless disregard for the truth.”

Melania Trump and the SEC did not respond to a request for comment.

A tumultuous year for Trump Media

From its inception, TMTG has been mired in scandal and red flags. “Weird and murky” was the way Matthew Tuttle, CEO of Tuttle Capital Management LLC, described to CNN the financial agreements behind Trump’s media venture.

Wilkerson told the Post that Trump refused to put any of his own money into the company despite demanding to own 90% of its shares. Fundraising for the company proved difficult because of Trump’s claims of fraud in the 2020 presidential election, so they decided on an alternate route to raise money that could avoid some investor scrutiny.

TMTG revealed late last year that it would go public through a merger with Digital World Acquisition Corp., which is a type of a shell company known as a SPAC, or a special purpose acquisition company. SPACs raise money that must be used to acquire and bring public private firms. Essentially, they are blank-check firms that exist solely to find suitable merger partners.

But the controversial merger has been stalled by legal scrutiny. The Justice Department is investigating, in addition to the SEC. In late June, Digital World revealed its board members had received subpoenas from a federal grand jury in the Southern District of New York related to due diligence regarding the deal.

The future of the merger

Digital World has said the federal probes have blocked the ability to get the deal with TMTG consummated. Digital World failed to receive shareholder approval by last month’s deadline to extend its merger agreement with TMTG. However, the shell company said last month it has been able to buy additional time because its sponsor, ARC Global Investments II, deposited nearly $3 million into the company’s trust account to exercise an option to unilaterally extend the merger agreement by three months.

If that hadn’t happened, the entire deal could have unraveled, forcing Digital World to return the roughly $300 million it has raised. That money is intended to fund the merger with Truth Social owner TMTG. A liquidation would have also threatened the additional $1 billion the Trump media company has raised.

Digital World shares fell 8% on Monday to $16.11, leaving them down nearly 70% so far this year.

Although SPACs have become popular on Wall Street, in part because they can save time and money compared with traditional initial public offerings, regulators have also warned investors about companies that go public in that manner. For example, SPAC sponsors can have conflicts of interest that allow them to gain more favorable investment terms than the public, giving them an incentive to see the merger through even if the deal is a bad one for regular investors.