Investment firms led by the former CEO of the SPAC that merged with\u00a0Donald Trump\u2019s media company allege that their files were hacked and stolen by a current member of the media company\u2019s board of directors.<\/p>\n
In a federal civil\u00a0lawsuit\u00a0filed in South Florida last month, the firms accuse board member Eric Swider of plotting a coup in early 2023 to replace Patrick Orlando as CEO of the special purpose acquisition cop, Digital World Acquisition Corp.<\/p>\n
As part of that attempted ouster, Swider and others allegedly \u201cstole access\u201d to the firms\u2019 computer systems and then \u201cused the stolen information to attack\u201d Orlando.<\/p>\n
It was \u201can audacious scheme to seize control of and enlarge their holdings,\u201d claims the suit, which was filed by Benessere Investment Group and ARC Global Investments II.<\/p>\n
The suit seeks damages and an injunction \u201cprohibiting the use of the stolen information and to stop the Defendants hacking\u201d the firms\u2019 files.<\/p>\n
Orlando was\u00a0fired\u00a0from Digital World in March 2023 and replaced by Swider.<\/p>\n
That blank-check company last month completed a\u00a0merger\u00a0to take\u00a0Trump Media & Technology Group Corp.\u00a0public, allowing it to trade on the Nasdaq. 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 has since erased all of those gains and more.<\/p>\n
On Wednesday alone, the share price fell nearly 9%. Since April 1, the stock has lost almost 45% of its value.<\/p>\n
The Florida lawsuit is just one in a series of messy and dramatic legal disputes that have come to define Trump Media\u2019s rocky road to an IPO, and its equally turbulent first weeks as a public company.<\/p>\n
DWAC in July settled\u00a0fraud charges\u00a0with the Securities and Exchange Commission, though the agency found the SPAC had submitted \u201cmaterially false and misleading\u201d filings.<\/p>\n
Trump Media in late March sued its co-founders over alleged\u00a0mismanagement\u00a0of the merger, and is seeking to bar them from owning the company\u2019s stock.<\/p>\n
Those co-founders have\u00a0sued Trump Media\u00a0in Delaware Chancery Court over their stake in the company.<\/p>\n
Critics, meanwhile, have labeled the company a\u00a0meme stock\u00a0and a \u201cscam.\u201d They point to the company\u2019s reported net loss of $58.2 million on revenue of just $4.1 million in 2023.<\/p>\n
Trump Media did not immediately respond to CNBC\u2019s requests for comment on the lawsuit. Emails sent to addresses that belonged to Swider and co-defendant Alexander Cano, DWAC\u2019s former president, did not immediately receive responses.<\/p>\n
In an interview with\u00a0Wired, which first reported the lawsuit earlier Wednesday, Swider denied all of the allegations against him.<\/p>\n
\u201cI just think he\u2019s never let go [of] the fact that I replaced him,\u201d Swider told the outlet. \u201cI don\u2019t know why it offends him so bad.\u201d<\/p>\n
The Florida lawsuit, which was filed shortly before the late-March merger, presents Orlando as successful in his efforts to DWAC into a merger agreement with Trump Media.<\/p>\n
It alleges that Swider misled DWAC\u2019s directors and business partners by publishing, \u201cfalse and misleading representations of what was occurring\u201d at the company.<\/p>\n
He also allegedly \u201coffered outsized compensation to the other directors he enlisted to collude with him in exchange for supporting his coup d\u2019\u00e9tat.\u201d<\/p>\n
Swider stood to massively increase his compensation through his accession to CEO of DWAC \u2014 but he also wanted to take control of ARC II, which owned about 19% of DWAC prior to the merger, according to the lawsuit.<\/p>\n
Trump Media in an April 1 regulatory filing reported that ARC II owns 6.9%, or about 9.5 million shares, of the post-merger company.<\/p>\n
Information about ARC II was held in an account on an electronic file storage website owned by Benessere, the suit says.<\/p>\n
To access the account, which \u201cstores the lifeblood\u201d of both investment firms, Swider allegedly enlisted Cano, Orlando\u2019s former assistant. The firms accuse Swider of promising to make Cano the president of DWAC in exchange for access to the account.<\/p>\n
Cano agreed, and Swider \u201cmade good on his promise,\u201d while also providing Cano with a convertible note worth 165,000 shares of DWAC\u2019s stock \u2014 an award valued at more than $6 million at the time, the suit alleges.<\/p>\n
Swider said in the interview with Wired that Orlando voted for Cano\u2019s award, adding that he never hired Cano as his assistant, as the suit alleges.<\/p>\n
The lawsuit says that Cano since February 2023 repeatedly accessed the storage account and \u201cimmediately\u201d provided the information within it to Swider.<\/p>\n
Swider then used it to email \u201cfalse and defamatory claims\u201d about Orlando to ARC II\u2019s members.<\/p>\n
In a March 5 email, included in the lawsuit as \u201cExhibit A,\u201d Swider accused Orlando of \u201cfailure to maintain a fiduciary responsibility\u201d to ARC II, among a litany of other claims.<\/p>\n
\u201cPatrick has threatened me with pending litigation for speaking out to fellow membership holders so I want to be clear about this. I am not disparaging Patrick,\u201d Swider wrote in the email.<\/p>\n
\u201cI am sure he is an amazing Human being, Honest. hard working. Looking out for your best interest. He is good looking. He is cool. I like him. Nothing in this email is meant to be defamatory. He has been great as a leader. Patrick- you are Awesome!!\u201d<\/p>\n
Orlando later discovered the email because Swider \u201cfailed to remove Orlando\u2019s wife from the mailing list,\u201d according to the lawsuit.<\/p>\n<\/p>\n
Investment firms led by the former CEO of the SPAC that merged with\u00a0Donald Trump\u2019s media company allege that their files were hacked and stolen by a current member of the media company\u2019s board of directors. In a federal civil\u00a0lawsuit\u00a0filed in South Florida last month, the firms accuse board member Eric Swider of plotting a coup […]<\/p>\n","protected":false},"author":0,"featured_media":3119,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-3118","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/3118","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=3118"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/3118\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/3119"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=3118"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=3118"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=3118"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}