Trump Media Sues Co-Founders Over Ownership Dispute

Trump Media & Technology Group, led by former President Donald Trump, has filed a lawsuit against its co-founders, Andy Litinsky and Wes Moss. The lawsuit alleges that Litinsky and Moss, characterized as “faithless fiduciaries,” failed to establish proper corporate governance at Trump Media and impeded the launch of Truth Social, Trump’s social media platform. The suit also accuses them of hindering Trump Media’s merger with Digital World Acquisition Corp., which was intended to take the company public.

Litinsky and Moss, in turn, had previously sued Trump Media, claiming that the company was attempting to dilute their stakes. They alleged that Trump Media’s actions would reduce their collective 8.6% stake to less than 1%. The lawsuit sought to prevent Trump and his associates from receiving new shares, which would further diminish Litinsky and Moss’s ownership.

The lawsuit from Trump Media seeks restitution of the shares issued to Litinsky and Moss, which the company claims they “failed to earn,” as well as damages for breaches of fiduciary duty. The shares were valued at approximately $600 million. Litinsky and Moss have not yet responded to the lawsuit.

In a separate development, venture capitalist Michael Shvartsman and his brother, Gerald Shvartsman, are reportedly nearing guilty pleas in an insider trading case related to the Trump Media and Digital World Acquisition Corp. merger. The brothers, who have pleaded not guilty, are expected to attend a change of plea hearing.

Trump Media recently went public, significantly increasing Trump’s net worth. However, the company’s stock has faced volatility, dropping about 20% after revealing a net loss of $58.2 million on revenues of $4.1 million for the full year. Despite this, Trump has made progress in addressing a $454 million bond in a civil fraud case against him. He posted a $175 million payment, and he is restricted from selling his shares in Trump Media for six months.