Democratic groups are calling for a congressional investigation into Trump Media following allegations that the company relied on emergency loans linked to a Russian-American businessman under federal investigation, to make its stock market debut.
What Happened: The Congressional Integrity Project, a Democratic-aligned group, has sent a letter to the Republican House oversight chair, James Comer, requesting a probe into the merger between Trump Media Technology Group DJT and Digital World Acquisition. The group is also demanding hearings into the nature of the loans, reported The Guardian.
“We are calling on you to investigate possible influence peddling and corruption involving a former president and current presidential candidate,” said the letter, according to the report.
The request comes in the wake of a report that Trump Media was kept afloat in 2022 with loans partly provided by Russian-American businessman Anton Postolnikov. The loans were sought when a securities investigation delayed the original merger date and threatened its cash reserves.
Trump Media reportedly sought bridge financing from an entity called ES Family Trust, which operated through an account at Paxum Bank, a small bank registered on the Caribbean island of Dominica. Leaked documents suggest that ES Family Trust operated like a shell company for Postolnikov, who co-owns Paxum Bank and is under criminal investigation in relation to the Trump Media merger.
Despite the controversy, Trump Media has not been accused of any wrongdoing. A lawyer for the company dismissed the story as a “hoax”.
The merger has drawn attention as it could significantly increase Trump’s net worth. If Trump sold part of his stake, he could potentially use the windfall to cover about $500m in legal costs from his various civil and criminal cases.
Why It Matters: The controversy surrounding Trump Media has been escalating since its Nasdaq debut, which was made possible by emergency loans received in 2022. Reports suggest that these loans were partly provided by a Russian-American businessman currently under federal investigation for insider trading and money laundering.
Furthermore, insider trading allegations linked to the company have surfaced, with two brothers admitting to their participation in a $22 million insider trading scheme. This has added to the scrutiny surrounding the company’s operations.
Amid these controversies, Trump has filed a lawsuit against the co-founders of Trump Media, alleging that they failed to fulfill their obligations, thus forfeiting their stock.
Price Action: On Thursday, Trump Media & Technology Group shares closed 5.45% lower at $46.15 in the regular session. The shares fell 0.5% in the after-hours session, according to Benzinga Pro data.
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