This photo illustration shows former President Donald Trump next to a mobile phone screen displaying the Truth Social app on February 21, 2022 in Washington, DC.
Stephanie Reynolds | AFP | Getty Images
An investment firm led by the former executive of a SPAC that merged with Donald Trump’s media company claims their documents were hacked and stolen by current board members of the media company.
in federal civil litigation The companies filed a lawsuit in South Florida last month accusing board member Eric Swider of orchestrating a coup in early 2023 to replace Patrick Orlando as special purpose acquisition company Digital World Acquisition CEO of Corp.
As part of the attempted eviction, Swider and others allegedly “stealed” access to the company’s computer systems and then “used the stolen information to attack” Orlando, the lawsuit says.
The lawsuit filed by Benessere Investment Group and ARC Global Investments II calls it “an audacious plan to seize control and expand their holdings.”
The lawsuit seeks damages and an injunction “to prohibit the use of the stolen information and prevent the defendants from hacking” company files.
Orlando was fired from Digital World in March 2023 and replaced by Swider.
The blank-check company completed its merger last month Trump Media Technology Group Inc. public, allowing it to trade on the Nasdaq Stock Market. The company, which owns Trump-centric social media app Truth Social, trades under the symbol DJT, soared in its stock market debut but has since erased those gains.
Shares fell nearly 9% on Wednesday alone. Since April 1, the stock has lost nearly 45% in value.
The Florida lawsuit is just one in a series of messy and dramatic legal disputes that have defined Trump Media’s rocky road to an IPO and its equally tumultuous first week as a public company.
DWAC settled with the SEC in July despite the agency finding that the SPAC submitted “materially false and misleading” documents.
Trump Media sued its co-founders in late March, alleging merger mismanagement and seeking to ban them from holding stock in the company.
The co-founders have sued Trump Media in Delaware Chancery Court over their shares in the company.
Meanwhile, critics have dubbed the company meme stocks and “scam.” They noted that the company had a net loss of $58.2 million in 2023 on revenue of just $4.1 million.
Trump Media did not immediately respond to CNBC’s request for comment on the lawsuit. Emails sent to the addresses of Swede and former DWAC chairman and co-defendant Alexander Cano did not receive an immediate response.
during an interview wiredThe lawsuit was first reported earlier Wednesday, with Swider denying all allegations against him.
“I just don’t think he’ll ever give up on the fact that I replaced him,” Swider told the outlet. “I don’t know why that makes him so angry.”
Suspected hacker attack
The Florida lawsuit, filed shortly before the merger in late March, suggests Orlando was successful in including DWAC in its merger agreement with Trump Media.
The complaint alleges that Swede misled DWAC’s directors and business partners by issuing “false and misleading statements about what happened at the company.”
He also allegedly “offered huge rewards to other directors he recruited who colluded with him in exchange for supporting his coup”.
The lawsuit alleges that Swede will significantly increase his compensation by serving as DWAC CEO, but he also wants to control ARC II, which owned about 19% of DWAC before the merger.
Trump Media reported in an April 1 regulatory filing that ARC II owns 6.9% of the combined company, or approximately 9.5 million shares.
The lawsuit alleges that information about ARC II was stored in an account at an electronic file storage site owned by Benessere.
To access the account, which “stored the lifeblood of two investment firms,” Swede allegedly hired Orlando’s former assistant, Cano. The companies allege Swede promised Cano to serve as DWAC president in exchange for access to the account.
On March 26, 2024, outside the Nasdaq market website in New York, the United States, a woman used her mobile phone in front of a screen displaying stock trading information for Truth Social and Trump Media & Technology Group.
Brendan McDermid | Reuters
Cano agreed, and Swede “fulfilled his promise” while also providing Cano with a convertible note worth 165,000 shares of DWAC stock — an award worth more than $6 million at the time, the lawsuit says.
In an interview with Wired, Swider said Orlando voted for Cano to win, adding that he never hired Cano as his assistant, as the lawsuit alleges.
The lawsuit alleges that Cano accessed the storage account multiple times since February 2023 and “immediately” provided information from it to Swider.
Swider then used it to send “false and defamatory statements” about Orlando to members of ARC II, the lawsuit says.
In a March 5 email, included as “Exhibit A” in the lawsuit, Swider accused Orlando of “failing to maintain its fiduciary duty to ARC II,” among a litany of other accusations.
“Patrick threatened me because of comments I made to other membership holders, so I want to make that clear. I was not disparaging Patrick,” Swider wrote in an email.
“I’m sure he’s a great guy, honest. Hard working. Has your best interest at heart. He’s handsome. He’s cool. I like him. Nothing in this email is defamatory. He’s great. As a leader. Patrick – you are awesome!!”
Orlando later discovered the email because Swider “failed to remove Orlando’s wife from the mailing list,” the lawsuit states.
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