Trump’s Truth Social deal stalled by San Diego-tied investigation – San Diego Reader

Digital World Acquisition Corp, a company with deep San Diego ties seeking to merge with Trump Media & Technology Group Corp in a deal valued at $1.3 billion, has disclosed in a regulatory filing that it is under investigation by a federal grand jury in New York, likely delaying the combination.

Trump Media & Technology Group operates Truth Social, a social network set up by ex-president Donald Trump in the wake of his ban from Twitter.

“On June 16, 2022, Digital World became aware that a federal grand jury sitting in the Southern District of New York has issued subpoenas to each member of Digital World’s board of directors; the subpoenas seek certain of the same documents demanded in the above-referenced SEC subpoenas, along with requests relating to Digital World’s S-1 filings, communications with or about multiple individuals, and information regarding Rocket One Capital,” says a June 16 8-K filing with the Securities and Exchange Commission.

“Additionally, on June 24, 2022, Digital World received a grand jury subpoena with substantially similar requests. These subpoenas, and the underlying investigations by the Department of Justice and the SEC, can be expected to delay effectiveness of the Registration Statement, which could materially delay, materially impede, or prevent the consummation of the Business Combination.”

“If the merger is not completed, Digital World will have to return the nearly $300 million raised in the I.P.O. to shareholders,” per a June 27 New York Times account of the disclosure.”The $1 billion that dozens of hedge funds have said they would invest in a completed deal would be canceled.”

Though not widely known in San Diego, SEC filings by Digital World list both the mailing and business addresses for the company at 5910 Pacific Center Blvd. , Suite 300, in San Diego’s Sorrento Valley.

That’s the same building occupied by Robot Cache, a video game distribution start-up co-founded by Digital World’s one-time CEO and current board member Lee Jacobson, a longtime but low-profile San Diego tech maven.

Digital World’s SEC filing describes Jacobson as “an entertainment executive with over 25 years of experience in the video game industry and 16 years of experience managing digital distribution at some of the most well-known publishers in the world. In January 2018, he co-founded and currently serves as the Chief Executive Officer for Robot Cache US, Inc., a PC games digital distribution company.”

“Beginning in September 2012, Lee was the Chief Executive Officer of Apmetrix Analytics Inc. until it liquidated its assets in 2019 in a Chapter 7 bankruptcy proceeding.”

Jacobson was profiled by the Union-Tribune in a May 1, 2019, story about his blockchain based Robot Cache.

“’We said, ‘Let’s use blockchain to invent a digital resale model that can take out GameStop — or certainly give them a run for their money,’ Jacobson said.”

“The company, officially founded in early 2018, uses the blockchain-based Ethereum network to execute smart contracts with the sale of each game, allowing the game rights to travel in a trackable, verifiable way.”

Per Jacobson’s LinkedIn profile, which features a photo of downtown’s Marriott Marquis Marina, he was managing director of San Diego-based ConvergentDirect from May 2014 to May 2018.

Digital World first filed with the SEC to go public in last spring. A second amendment to the registration statement, dated last July 26, described the firm as “a newly organized blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to as our initial business combination throughout this prospectus.”