This photo illustration shows former President Donald Trump next to a phone screen displaying the Truth Social app, in Washington, DC, on February 21, 2022.
Stefani Reynolds | AFP | beautiful images
Investment firms led by former SPAC CEO merged with Donald TrumpThe company’s media company alleges that its files were hacked and stolen by a current member of the media company’s board of directors.
In a federal civil war lawsuit filed in South Florida last month, the companies accused board member Eric Swider of plotting a coup in early 2023 to replace Patrick Orlando as CEO of the special purpose acquisition company, Digital World Acquisition Corp.
Swider and others allegedly “stole access” to the company’s computer system and then “used the stolen information to attack” Orlando, according to the lawsuit.
The lawsuit filed by Benessere Investment Group and ARC Global Investments II said it was “a bold plan to gain control and expand their holdings.”
The lawsuit seeks damages and an injunction “prohibiting the use of the stolen information and preventing Defendants from hacking” the company’s files.
Orlando has Fired left Digital World in March 2023 and was replaced by Swider.
That blank check company last month completed one merger take Trump Technology and Communications Group public, allowing it to trade on the Nasdaq stock market. The company, which owns the Trump-centric social media app Truth Social and trades under the ticker DJT, soared in its stock market debut but those gains have since erased.
On Wednesday alone, the stock price fell nearly 9%. Since April 1, the stock has lost nearly 45% of its value.
The Florida lawsuit is just one in a series of messy and dramatic legal disputes that have defined Trump Media’s rocky road to an IPO, as well as its equally tumultuous first weeks as a company. public company.
DWAC in July resolved Fraud charges with the Securities and Exchange Commission, even though the agency found the SPAC had submitted “false and misleading” filings.
Trump Media in late March sued its co-founders over the allegations mismanagement about the merger and are seeking to ban them from owning the company’s stock.
Those co-founders do sue Trump Media in the Delaware Chancery Court regarding their shares in the company.
Meanwhile, critics have taken issue with the company meme stocks and a “CheatThey pointed out that the company reported a net loss of $58.2 million on revenue of just $4.1 million in 2023.
Trump Media did not immediately respond to CNBC’s request for comment on the lawsuit. Emails sent to the addresses of Swider and co-defendant Alexander Cano, former president of DWAC, did not receive an immediate response.
In an interview with WiredFirst reported on the lawsuit earlier Wednesday, Swider denied all of the allegations against him.
“I just thought he would never let go [of] the fact that I replaced him,” Swider told the outlet. “I don’t know why that offended him so much.”
The alleged hack
The Florida lawsuit, filed shortly before the merger in late March, suggests that Orlando was successful in its efforts to include DWAC in its merger agreement with Trump Media.
It alleges that Swider misled DWAC’s directors and business partners by publishing “false and misleading statements about what was happening” at the company.
He was also accused of “offering excessive compensation to other directors whom he enlisted to collude with him in exchange for supporting his coup.”
According to the lawsuit, Swider stood to massively increase compensation by becoming DWAC’s CEO – but he also wanted to take control of ARC II, which owned about 19% of DWAC before the merger.
Trump Media in an April 1 regulatory filing reported that ARC II owned 6.9%, or about 9.5 million shares, of the combined company.
The complaint said information about ARC II was kept in an account on an electronic file storage website owned by Benessere.
To access the “lifeline storage” accounts of both investment firms, Swider is said to have asked Cano, Orlando’s former assistant. The companies accused Swider of promising to make Cano president of DWAC in exchange for access to the account.
A woman uses her phone in front of a screen showing trading information about shares of Truth Social and Trump Media & Technology Group, outside the Nasdaq Market location in New York City, U.S., March 26, 2019. 2024.
Brendan Mcdermid | Reuters
Cano agreed and Swider “made good on his promise,” and offered Cano a convertible bond worth 165,000 shares of DWAC – an award worth more than $6 million at the time, the filing said. lawsuit alleges.
Swider said in an interview with Wired that Orlando voted for Cano’s award, adding that he never hired Cano as his assistant as the lawsuit alleges.
The lawsuit says that Cano since February 2023 repeatedly accessed the hosting account and “immediately” provided the information therein to Swider.
Swider then used it to email “false and defamatory statements” about Orlando to members of ARC II, according to the lawsuit.
In a March 5 email — included in the lawsuit as “Exhibit A” — Swider accused Orlando of “failing to maintain fiduciary responsibility” for ARC II, among other complaints.
“Patrick has threatened me with pending litigation for speaking out against fellow members, so I want to be clear about this,” Swider wrote in an email. I don’t criticize Patrick.”
“I’m sure he’s a great person, Honest, hard working. Always looking out for your best interests. He’s handsome. He’s cool. I like him. You’re welcome. There is defamation in this email. He is amazing.” as a leader. Patrick- you are amazing!!”
According to the lawsuit, Orlando later discovered the email because Swider “failed to remove Orlando’s wife from the mailing list.”
