Trump has named Nunes as its CEO.

Regulators are investigating into a proposal that would put Donald Trump’s new social media firm to the stock market, a deal that has drew in both Trump supporters and those eager to make a quick buck.

In a filing with regulators on Monday, the company collaborating with Trump Media & Technology Group acknowledged the questions. It also provided financial projections for the startup, which aims to compete with Netflix and other streaming video services, as well as Twitter and other networks that blocked Trump following the Jan. 6 Capitol rioting. It announced over the weekend that it had secured $1 billion in funding from an unknown group of institutional investors.

Separately, Trump Media said that Rep. Devin Nunes, a California Republican, will leave Congress in January to join the company as CEO. Nunes, the former leader of the House Intelligence Committee, was a staunch supporter of Trump during the investigation into Russian election meddling in 2016 and the president’s impeachment by the Democratic-led House in 2019.

The emphasis of the regulatory investigation is on Trump’s media venture’s October statement that it will merge with Digital World Acquisition Corp. That business had debuted three weeks prior on the New York Stock Exchange with the sole goal of acquiring a privately held corporation. The trading symbol “DWAC” is frequently used to refer to it.

DWAC stated on Monday that it is collaborating with the Securities and Exchange Commission and the Financial Industry Regulatory Authority’s “preliminary, fact-finding inquiries.”

The request for documents was dismissed by Trump as a political attack on him.

He said on the conservative station Newsmax Monday night, “You know, this is just a continuation of witch hunts.” “They want to look at everything you do.”

The Securities and Exchange Commission (SEC) requested documents from DWAC’s board of directors and interactions between DWAC and Trump’s media venture, among other things, early last month. The SEC’s request stated that the investigation “does not mean that the SEC has decided that anyone violated the law or that the SEC has an unfavorable opinion of DWAC or any person, event, or security,” according to DWAC.

According to Jay Ritter, an IPO expert at the University of Florida, the SEC could be looking into whether DWAC and Trump’s company had any discussions about a deal before DWAC’s own initial public offering of stock.

These blank-check businesses, also known as special-purpose acquisition companies, or SPACs, aren’t supposed to line up acquisition targets before selling their own shares, according to the rules. Senator Elizabeth Warren issued a letter to Gary Gensler, the chairman of the Securities and Exchange Commission, on Nov. 17 asking if the agency is looking into whether DWAC broke the law by holding such meetings and deceiving potential investors by failing to disclose them before its IPO.

When asked how concerned he would be if he were the target of an SEC investigation, Ritter answered, “It depends on what I know.” It could be harmless or pro forma material, or it could be quite severe.”

It’s unclear what the regulators are looking into. Furthermore, the regulatory regulations on SPAC discussions with potential acquisition targets are murky, limiting only “substantive” discussions.

Even before the New York Times reported on Oct. 29 that DWAC CEO Patrick Orlando had met with Trump and his representatives before bringing DWAC public, the Trump deal stood out as unique in many respects. Blank-check companies usually buy businesses with staff, customers, and a track record, which the Trump acquisition does not have. Several SPAC specialists also noted that the three weeks it took DWAC to find and reach an agreement with TMTG was abnormally quick.

On Monday, DWAC and TMTG did not reply to demands for comment.

“The SEC does not comment on the existence or nonexistence of a potential inquiry,” a representative for the SEC said.

Separately, before the Oct. 20 merger deal was revealed, the Financial Industry Regulatory Authority, or FINRA, requested an examination of trading in DWAC’s stock in late October and early November. That could be a sign of an investigation into insider trading, according to Ritter, but proving it is notoriously tough.

As a result of the merger announcement, DWAC’s shares soared from $9.96 to $94.20 in just two days, attracting Trump fans and quick-money speculators. Since then, the stock has dropped to around $44. The stock dropped 2.6 percent to $43.81 on Monday.

At least some investors had high hopes for Trump’s media endeavor, as seen by the hefty price. DWAC also provided financial projections for the company in its regulatory filing, which has yet to launch but aims to create a “non-cancellable” worldwide society.

According to the presentation, the company’s TRUTH Social service could have 81 million users by 2026, roughly 7 million more than voted for Trump in the previous presidential election in the United States.

SPACs are infamous for making overly optimistic projections regarding their future growth in investor presentations.

According to the petition, TMTG is expected to earn roughly $3.7 billion in revenue in five years. That’s more than Restoration Hardware, Winnebago Industries, and entertainment behemoth iHeart Media, which owns over 800 radio stations, make in a year.

In 2026, the monthly subscription per user for its TMTG+ video service, which will offer “non-woke” entertainment and news, might be $9. During the first nine months of this year, Netflix received an average of $14.49 in income from its U.S. and Canadian subscribers.

“The time has come to reopen the Internet and allow for the free flow of ideas and speech without censorship,” Nunes said in a statement announcing his appointment as CEO.