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Trump Media director accused of ‘hacking’ files: lawsuit

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This photo illustration shows an image of former President Donald Trump next to a phone screen that is displaying the Truth Social app, in Washington, DC, on February 21, 2022.

Stefani Reynolds | AFP | Getty Images

Investment firms led by the former CEO of the SPAC that merged with Donald Trump‘s media company allege that their files were hacked and stolen by a current member of the media company’s board of directors.

In a federal civil lawsuit filed in South Florida last month, the firms accuse board member Eric Swider of plotting a coup in early 2023 to replace Patrick Orlando as CEO of the special purpose acquisition cop, Digital World Acquisition Corp.

As part of that attempted ouster, Swider and others allegedly “stole access” to the firms’ computer systems and then “used the stolen information to attack” Orlando.

It was “an audacious scheme to seize control of and enlarge their holdings,” claims the suit, which was filed by Benessere Investment Group and ARC Global Investments II.

The suit seeks damages and an injunction “prohibiting the use of the stolen information and to stop the Defendants hacking” the firms’ files.

Orlando was fired from Digital World in March 2023 and replaced by Swider.

That blank-check company last month completed a merger to take Trump Media & Technology Group Corp. public, allowing it to trade on the Nasdaq. The company, which owns the Trump-centric social media app Truth Social and trades under the ticker DJT, soared in its stock-market debut but has since erased all of those gains and more.

On Wednesday alone, the share price fell nearly 9%. Since April 1, the stock has lost almost 45% of its value.

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The Florida lawsuit is just one in a series of messy and dramatic legal disputes that have come to define Trump Media’s rocky road to an IPO, and its equally turbulent first weeks as a public company.

DWAC in July settled fraud charges with the Securities and Exchange Commission, though the agency found the SPAC had submitted “materially false and misleading” filings.

Trump Media in late March sued its co-founders over alleged mismanagement of the merger, and is seeking to bar them from owning the company’s stock.

Those co-founders have sued Trump Media in Delaware Chancery Court over their stake in the company.

Critics, meanwhile, have labeled the company a meme stock and a “scam.” They point to the company’s reported net loss of $58.2 million on revenue of just $4.1 million in 2023.

Trump Media did not immediately respond to CNBC’s requests for comment on the lawsuit. Emails sent to addresses that belonged to Swider and co-defendant Alexander Cano, DWAC’s former president, did not immediately receive responses.

In an interview with Wired, which first reported the lawsuit earlier Wednesday, Swider denied all of the allegations against him.

“I just think he’s never let go [of] the fact that I replaced him,” Swider told the outlet. “I don’t know why it offends him so bad.”

The alleged hack

The Florida lawsuit, which was filed shortly before the late-March merger, presents Orlando as successful in his efforts to DWAC into a merger agreement with Trump Media.

It alleges that Swider misled DWAC’s directors and business partners by publishing, “false and misleading representations of what was occurring” at the company.

He also allegedly “offered outsized compensation to the other directors he enlisted to collude with him in exchange for supporting his coup d’état.”

Swider stood to massively increase his compensation through his accession to CEO of DWAC — but he also wanted to take control of ARC II, which owned about 19% of DWAC prior to the merger, according to the lawsuit.

Trump Media in an April 1 regulatory filing reported that ARC II owns 6.9%, or about 9.5 million shares, of the post-merger company.

Information about ARC II was held in an account on an electronic file storage website owned by Benessere, the suit says.

To access the account, which “stores the lifeblood” of both investment firms, Swider allegedly enlisted Cano, Orlando’s former assistant. The firms accuse Swider of promising to make Cano the president of DWAC in exchange for access to the account.

A woman uses her phone in front of screens displaying trading information about shares of Truth Social and Trump Media & Technology Group, outside the Nasdaq Market site in New York City, U.S., March 26, 2024.

Brendan Mcdermid | Reuters

Cano agreed, and Swider “made good on his promise,” while also providing Cano with a convertible note worth 165,000 shares of DWAC’s stock — an award valued at more than $6 million at the time, the suit alleges.

Swider said in the interview with Wired that Orlando voted for Cano’s award, adding that he never hired Cano as his assistant, as the suit alleges.

The lawsuit says that Cano since February 2023 repeatedly accessed the storage account and “immediately” provided the information within it to Swider.

Swider then used it to email “false and defamatory claims” about Orlando to ARC II’s members.

In a March 5 email, included in the lawsuit as “Exhibit A,” Swider accused Orlando of “failure to maintain a fiduciary responsibility” to ARC II, among a litany of other claims.

“Patrick has threatened me with pending litigation for speaking out to fellow membership holders so I want to be clear about this. I am not disparaging Patrick,” Swider wrote in the email.

“I am sure he is an amazing Human being, Honest. hard working. Looking out for your best interest. He is good looking. He is cool. I like him. Nothing in this email is meant to be defamatory. He has been 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,” according to the lawsuit.



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Who is Paula Vennells? Ex-Post Office boss in Horizon IT inquiry

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The ordained priest who led the Post Office from 2012 to 2019 faces three days of questioning at the Horizon Inquiry.



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Deutsche Bank lifts S&P 500 target on strong earnings By Investing.com

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Deutsche Bank strategists increased their year-end target for the to 5,500, up from the previous 5,100.

The revision is based on a strong earnings cycle and the anticipation that market confidence will grow by the end of the year, which should positively influence US stocks.

“We see the earnings cycle having plenty of legs,” strategists said in note to clients on Friday.

“While all the growth may not materialize this year, we see market confidence in a continued recovery rising by year end, supporting equity multiples.”

However, the strategists also cautioned about potential market volatility due to geopolitical risks. Moreover, they warned that a hung election poses a “real risk” for markets.

The brokerage firm noted that although all growth may not materialize this year, the market’s confidence in a continued recovery is expected to rise by year-end. This sentiment is projected to support equity multiples.

Alongside the revised index target, Deutsche Bank has also raised its base case for S&P 500 earnings to $258 per share from the previous estimate of $250. This adjustment indicates a year-over-year growth of 13%.

If the macroeconomic growth continues to exceed trends as it has for the past seven quarters, the strategists suggest earnings could reach as high as $271 per share, which is at the upper end of their original forecast range of $250 to $271.

 





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Mercedes-Benz workers in Alabama vote against union

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United Auto Workers (UAW) members and supporters on a picket line outside the ZF Chassis Systems plant in Tuscaloosa, Alabama, US, on Wednesday, Sept. 20, 2023.

Andi Rice | Bloomberg | Getty Images

Mercedes-Benz workers in Alabama have voted against union representation by the United Auto Workers, the National Labor Relations Board said Friday.

The results are a blow to the UAW’s organizing efforts a month after the Detroit union won an organizing drive of roughly 4,330 Volkswagen plant workers in Tennessee. Voting started Monday and ended Friday.

Union organizing failed with 56% of the vote, or 2,642 workers, casting ballots against the UAW, according to the NLRB, which oversaw the election. More than 90% of the 5,075 eligible Mercedes-Benz workers voted in the election, according to the results.

The NLRB said 51 ballots were challenged and not counted, but they aren’t determinative to the outcome of the election. There were five void ballots. 

The union and company have five business days to file objections to the election, including any alleged interference, according to the NLRB. If no objections are filed, the election result will be certified, and the union will have to wait one year to file for a union election for a similar bargaining unit.

Mercedes-Benz in a statement said company officials “look forward to continuing to work directly with our Team Members to ensure [Mercedes-Benz US International] is not only their employer of choice, but a place they would recommend to friends and family.”

United Auto Workers President Shawn Fain (right) and UAW Secretary-Treasurer Margaret Mock (left) lead a march outside Stellantis’ Ram 1500 plant in Sterling Heights, Michigan after the union called a strike at the plant on Oct. 23, 2023.

Michael Wayland / CNBC

The loss is expected to hurt the UAW in an unprecedented organizing drive launched late last year of 13 non-union automakers in the U.S. after securing record contracts with Detroit automakers Ford Motor, General Motors and Stellantis. Those agreements included significant wage increase, reinstatement of cost-of-living adjustments and other benefits.

UAW President Shawn Fain said while the Mercedes-Benz vote was obviously not the result the union wanted, it was a valiant effort, adding the vote “isn’t a failure” but a “bump in the road.”

“While this loss stings, I’ll tell you this, we’re going to keep our heads up, keep our heads up high. These workers have nothing to do but be proud in the effort they put forth and what they’ve done,” he said Friday during a media conference. “We fought the good fight and we’re going to continue on, continue forward. Ultimately, these workers here are going to win.”

The Mercedes-Benz vote was expected to be more challenging for the union than the Volkswagen plant in Tennessee, where the union had already established a presence after two failed organizing drives in the past decade and where it faced less opposition from the automaker.

Stephen Silvia, author of “The UAW’s Southern Gamble: Organizing Workers at Foreign-Owned Vehicle Plants,” noted Mercedes-Benz replaced the plant’s leader weeks ahead of the election. He said companies routinely do this, promising workers changes at their facilities in an effort to stave of organizing.

“Companies do anti-union campaigns because they can be effective, and I think this one was effective,” said Silvia, a professor at American University in Washington, D.C. “A common piece of an anti-union campaign is firing the plant manager … That seems to have persuaded enough of the workers to vote against the union.”

Mercedes-Benz Alabama plant votes against unionization

Alabama Gov. Kay Ivey, who was one of six Republican governors to condemn the union’s organizing drive, hailed the outcome of the vote.

“The workers in Vance have spoken, and they have spoken clearly! Alabama is not Michigan, and we are not the Sweet Home to the UAW. We urge the UAW to respect the results of this secret ballot election,” she said.

Workers at Mercedes-Benz’s Tuscaloosa plant, located about 60 miles southwest of Birmingham, have produced more than 4 million vehicles since the plant opened in 1997, including 295,000 vehicles in 2023, according to the plant’s website.

The Alabama plant currently produces vehicles such as the gas-powered GLE and GLS Maybach SUVs as well as the all-electric EQS and EQE SUVs.

The NLRB last week said it continues to process and investigate open unfair labor practice charges filed by the UAW against automakers, including six unfair labor practice charges against Mercedes-Benz since March.

Fain said Friday the union would continue to move forward with those charges. He declined to say whether the union plans to challenge the election results, saying he’d “leave that” to the union’s legal team.

The charges allege that Mercedes-Benz has “disciplined employees for discussing unionization at work, prohibited distribution of union materials and paraphernalia, surveilled employees, discharged union supporters, forced employees to attend captive audience meetings, and made statements suggesting that union activity is futile,” the NLRB said.

The union has filed other charges against automakers Honda, Hyundai, Lucid, Rivian, Tesla and Toyota, according to the NLRB.



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