(Reuters) – The owner of Donald Trump’s social network Truth Social said on Monday it was cooperating with a Financial Industry Regulatory Authority (FINRA) investigation into its scrappy merger.
The request from FINRA, Wall Street’s self-regulatory body, was primarily related to trading before the announcement of the Digital World Acquisition Corp deal and should not be considered an indication of wrongdoing, Trump Media and Technology Group (TMTG) said.
Since going public, TMTG has experienced a crisis. An army of Trump supporters and speculators snapped up its shares, sending the stock soaring as much as 59% in its March 26 Nasdaq debut, but the stock has since reversed that rally, giving the company a market value of nearly $7 billion.
Former President Trump, who is running as the Republican candidate in the November 5 presidential election, owns a majority stake in TMTG. He is an active user of Truth Social, which seeks to position itself as a safe haven for free speech.
TMTG delayed the release of its quarterly report last week after firing its auditor BF Borgers, whom the Securities and Exchange Commission accused of “massive fraud” earlier this month.
The company reported earnings earlier Monday, reporting a wider loss in the first quarter due to certain non-cash expenses it incurred before the merger was completed.
Net loss for the three months ended March 31 was $327.6 million, compared with $210,300 a year earlier.
The vast majority of “merger-related expenses” have been eliminated, according to TMTG CEO Devin Nunez.
The vast majority of the company’s 621,000 shareholders are retail investors as of April 29, according to the company.