The Securities and Exchange Commission stated on Thursday that it had reached a settlement with the cash-rich shell firm that deliberate to merge with former President Donald J. Trump’s social media firm, probably paving the way in which for the much-delayed deal to proceed.

Under the settlement, Digital World Acquisition Corp. can pay a penalty of $18 million and revise a few of its company filings to adjust to federal securities legal guidelines. The S.E.C. was investigating whether or not Digital World had flouted merger legal guidelines governing particular goal acquisition corporations.

The S.E.C. charged Digital World, a particular goal acquisition firm, with deceptive traders with its disclosures.

“These disclosure failures are particularly problematic because investors focus on factors such as the SPAC’s management team and potential merger targets when making financial decisions,” stated Gurbir S. Grewal, director of the S.E.C.’s division of enforcement.

Digital World had announced a tentative settlement in a regulatory filing this month.

But many hurdles stay for Digital World to finish its merger with Trump Media & Technology Group, the mother or father firm of Truth Social, a Twitter-like platform that has develop into the previous president’s major megaphone to achieve his supporters on the web.

Digital World, which had raised $300 million from traders in a September 2021 preliminary public providing, is dealing with a Sept. 8 deadline to finish its take care of Trump Media or might be pressured to liquidate and return the money. This week, the SPAC introduced plans to hunt shareholder approval to increase that deadline, however Trump Media has not but signaled it’s prepared to maintain the pending deal alive past Sept. 8.

Soon after Digital World and Trump Media introduced a deal to merge in October 2021, the S.E.C. opened an investigation into whether or not preliminary merger discussions between the 2 events had violated federal securities legal guidelines.

Shell corporations are set as much as elevate cash from traders after which discover a firm to purchase, however they don’t seem to be allowed to carry severe merger discussions earlier than they go public. Such corporations have a restricted time — normally two years — to finish a merger earlier than they’re required to return the money they raised to traders.

Last month, federal prosecutors in New York charged three males — two brothers and a former Digital World board member — with participating in a scheme that generated $22 million in illicit buying and selling earnings forward of the proposed merger.

This week, Digital World set Aug. 17 because the deadline for getting at the very least 65 p.c of its 400,000 shareholders to approve an extension that may afford it extra time to finish the merger. But final 12 months, when Digital World secured the same extension, it took a number of months of voting to get a adequate variety of shareholders to approve the measure.

A overwhelming majority of Digital World shareholders are retail traders, and plenty of of them are supporters of the previous president and energetic customers on Truth Social. A merger would supply Trump Media with instantaneous money to finance Truth Social’s operations. It is unclear why Trump Media has not dedicated to giving Digital World extra time to finish the merger.