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Trump’s Social Network Deal Under Grand Jury Scrutiny

The public listing of former President Donald J. Trump’s social media company took a fresh blow on Monday when the cash-rich shell company merging with Mr. Trump’s company disclosed in a regulatory filing that a federal grand jury in New York recently issued subpoenas to the company and its directors.

The grand jury subpoenas were issued within the past week, according to the filing by Digital World Acquisition Corporation, a special purpose acquisition company, or SPAC, that announced a merger with Trump Media & Technology Group in October. After the merger, Trump Media would assume Digital World’s listing and trade as a public company.

The disclosure by Digital World is the first indication that federal prosecutors in Manhattan have joined in the scrutiny of the merger between Digital World and Trump Media, which has been under investigation by financial regulators for months. The investigation threatens to further delay the completion of the merger, which would provide Mr. Trump’s company with up to $1.3 billion in capital, in addition to a stock market listing.

The Securities and Exchange Commission and Financial Industry Regulatory Authority opened investigations within weeks of the merger announcement. Digital World’s filing on Monday said the grand jury subpoenas sought information similar to what the S.E.C. had already requested.

The federal grand jury also sought “information regarding Rocket One Capital.” The filing did not disclose what information the grand jury wanted about Rocket One, which is a venture capital firm in Miami.

In a separate filing, Digital World disclosed that Bruce Garelick had resigned as a director. Mr. Garelick is listed in Digital World filings as the chief strategy officer at Rocket One.

Mr. Garelick did not immediately respond to request for comment. The filing did not give a reason for his resignation.

The S.E.C. investigation has focused on whether there were serious discussions between the leadership of Digital World and Trump Media before the SPAC went public last September and those talks were not disclosed in regulatory filings. SPACs, which raise money to go public in the hopes of finding a merger candidate, are not supposed to have an acquisition target in mind when they raised money from investors.

Regulators also requested information about unusual trading activity in securities of Digital World before the merger announcement. There was a big surge in trading of Digital World warrants — a security that gives the holder the right to buy shares at later date and at a specified price — before the merger announcement.

Trump Media issued a statement in response to Digital World’s disclosure that said it was “focused on reclaiming the American people’s right to free expression.” The company added, “We encourage — and will cooperate with — oversight that supports the S.E.C.’s important mission of protecting retail investors.”

Trump Media’s flagship product is Truth Social, a Twitter-like social media clone that Mr. Trump has taken to posting messages on and, after a slow start, has begun gathering adherents, especially among conservatives and other supporters of the former president. Mr. Trump was banned from Twitter in January 2021 after repeatedly posting messages that claimed the 2020 presidential election was stolen and for not quickly denouncing the Jan. 6 attack on the Capitol building.

Shares of Digital World, which closed last week at $27.82, fell more than 10 percent in premarket trading. The stock has declined more than 70 percent from its March peak, but remains well above its listing price.

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