Digital World Acquisition Corp., the blank-check firm seeking to take Donald Trump’s social media company public, misled investors, according to the US Securities and Exchange Commission.

The SEC on Thursday alleged that documents filed by Digital World in 2021 were “materially false.” The firm will pay $18 million to settle the allegations if it completes the deal with Trump Media & Technology Group, which runs the Truth Social platform.

According to the SEC, Digital World said in filings that it hadn’t had any discussions with target companies before offering shares. However, the regulator alleged the firm had, in fact, had extensive conversations with the Trump media company.

Special purpose acquisition companies list shares and then find a firm to merge with and take public. If a SPAC doesn’t find a company to merge with, it’s supposed to return the funds it raised to investors.

Digital World will only pay the penalty if the SPAC deal closes, the SEC said. The deadline for that is Sept. 8, unless shareholders agree to extend the deadline. Trump wasn’t accused of wrongdoing by the agency.

A lawyer listed for the blank-check company didn’t immediately reply to a request for comment. Digital World disclosed July 3 that it had reached a preliminary agreement.

Over the past several years, Wall Street’s main regulator has raised concerns about SPACs. The SEC has proposed a new rule that would force the firms to disclose more information about their sponsors and potential conflicts of interest.

Digital World shares spiked 36% to $18.17 in post-market trading.

--With assistance from Bailey Lipschultz.

This article was provided by Bloomberg News.