Fake shell corporations that traded on the stock market joins Trump Media company. Trump now has 300 million from donations in the media company that has no employees except Kevin Nunes.

In 2017, the SEC suspended trading in Atlas Technology International, a company that had gone public in 2014 as an in-home bakery called Sweets & Treats but which said it transferred to new owners two years later, changing its name to Atlas and shifting to touch-screen devices. The business was allegedly part of a “fraudulent scheme” to manipulate the markets by a California businessman named Ahmad Haris Tajyar, according to an SEC complaint, which this year charged Tajyar with securities law violations.

Operating four online brokerage accounts in different names, Tajyar allegedly bought and sold Atlas shares with himself to create the illusion of an actively traded business, the SEC said in its August 2021 complaint against Tajyar. He also allegedly staged an earnings call with a friend posing as a Wall Street analyst asking questions about the business and allegedly paid a professional investment analyst to write research on the company, the SEC complaint said.

In its regulatory filings, Atlas listed Arc Capital as a creditor that had provided Atlas with loans of more than $80,000. But in a 2017 declaration by an SEC staff member, the agency said Tajyar and the principals at Arc Capital may have been “undisclosed control persons” for Atlas. The logo for Atlas appears in one of Arc’s promotional brochures on a list of its “public listing” clients.

Two of the former Arc employees said Arc had worked behind the scenes as an adviser of Atlas, providing marketing materials and financial models. One of the former employees said he worked on the deal but was taken off by his managers when he started asking questions about why its office address pointed to an L.A. parking garage and why he couldn’t meet with any of its executives in person.

This year, a judge permanently enjoined Tajyar from selling or promoting stocks as a result of his role in Atlas. Tajyar accepted the judgment without admitting or denying the allegations. He did not respond to requests seeking comment.

Arc was not named in the SEC’s complaint, and it’s unclear whether the SEC is still investigating the firm for its alleged role in the Atlas scheme.

Trump deal rides SPAC boom
The Trump deal is part of a recent boom in SPACs, which are seen as an easier way for some businesses to go public without the same expense and scrutiny of a traditional IPO.

In these deals, a SPAC, also known as a “blank check” firm, holds a public offering to raise money from institutional investors. When the SPAC’s management team identifies a private company to merge with, the SPAC’s investors are given the option of approving the deal and receiving equity in the newly public company — or taking their money back and walking away.

According to data published by New York law firm White & Case, 181 companies went public via a SPAC merger in the first nine months of 2021 — up from 93 in all of 2020 and 26 in 2019.

Trump’s new social media SPAC is soaring. Also, what is a SPAC?

Arc Capital and an affiliated firm, Arc Group, have attempted to capitalize on this investment wave, becoming an adviser to at least 15 blank check companies in recent years, according to a review of regulatory filings. On several SPAC deals, including Digital World Acquisition, Arc has served as the sponsor, which is usually the firm that puts up the initial capital to hire lawyers, brokers and a management team in exchange for getting a sizable portion of the company that ultimately goes public.

Not all of the deals work out. Yunhong International, a blank check company Arc once described as a “successful SPAC listing” in a promotional brochure on its website, said in a filing last month that it would dissolve and return money to investors because it failed to meet its deadline of finding a start-up to acquire within a set time period. This type of requirement is unique to SPAC deals and probably will cause many deals to dissolve in the coming years, financial industry experts said.

Yunhong and Digital World, the blank check firm planning to buy Trump Media, are both led by a CEO named Patrick Orlando, a former investment banker based in Miami. He did not respond to requests for comment.

Many of the same executives, hedge funds and bankers appear repeatedly on Arc’s SPAC deals. Earlier this year, one of the investors in Yunhong claimed in a lawsuit that Kingswood, an investment bank that has been the underwriter for several Arc SPAC deals, is partly owned by Cinta. The investor claimed this was an undisclosed conflict of interest, since Kingswood was supposed to be acting impartially when it brokered deals with outside investors.

Lawyers for Benchmark, the parent company of Kingswood, said in a court filing that the investor “failed to substantiate” the claim that Cinta was an owner of Kingswood. Representatives for Kingswood and the Yunhong investor did not respond to requests for comment.

In June, Kingswood changed its name EF Hutton, taking the moniker of a famed, century-old investment bank. In a news release, Kingwsood said it had secured the rights to the trademark and consulted with the grandson of one of EF Hutton’s original founders.

Kingswood or EF Hutton are listed as the underwriter on all 15 of the SPAC companies where Arc is listed as an adviser. EF Hutton is the “exclusive placement agent and capital markets adviser” to the Trump SPAC, filings show. Digital World said in a filing that EF Hutton would receive a $25 million commission for pitching the deal to investors.

The bank helped prepare the slide presentation Digital World and Trump Media submitted to regulators as part of its proposal. The slides indicate that Trump Media expects to generate billions of dollars in revenue by competing in a number of different industries — social media, streaming, podcasting — but it has not announced any fully-formed products or services. They also include the first name and last initial of 30 possible staffers, along with the logos of 33 of their employers. But they provide no further information, making it difficult to identify the people or their experience.

Last week, Trump Media also announced it would partner with Rumble, a YouTube rival popular with conservatives, to deliver streaming content to its yet-to-launch social media platform.

Rep. Devin Nunes to leave Congress to become Trump media company CEO

It’s not uncommon for SPAC merger candidates to make bold promises light on details; they are often young companies with little or no revenue. Companies going public through a SPAC have more latitude to paint a rosy picture of their prospects compared with traditional IPO companies, which must have all of their financial statements and projections vetted by auditors and reviewed by regulators, securities lawyers said.

Still, the lack of specifics in the Trump slide presentation was “hilarious, even compared with other SPACs,” said Michael Ohlrogge, an assistant law professor at New York University who has researched SPAC transactions.

“So far, it’s vaporware,” said James Angel, a professor of finance at Georgetown University. The true test will come after the merger, when shareholders will expect Trump to use the money he has raised to build a formidable business, he said.

“Now that our ex-president has a billion-dollar war chest to play with,” Angel said, “it remains to be seen if he can actually build a successful media franchise.”


This is dry reporting. I prefer my to the point POV.