Shares of Digital World Acquisition Corp. (NASDAQ: DWAC) skyrocketed as much as 93% early Friday, according to data provided by S&P Global Market Intelligence. It then tempered its gains to trade up 42% as of 12:20 p.m. ET after the special purpose acquisition company (SPAC) aiming to take Donald Trump's social media platform public settled fraud charges with the U.S. Securities and Exchange Commission (SEC).

Earlier this month, DWAC shares climbed after it told investors it had reached an agreement in principle with the SEC over allegedly false and misleading statements made by the company leading up to its planned merger to bring former President Donald Trump's Trump Media Technology Group (TMTG) public.

For perspective, SPACs are prohibited by the SEC from soliciting specific merger targets prior to filing for an initial public offering (IPO). And according to a filing by the SEC late yesterday, Digital World Acquisition Corp. executives held "extensive SPAC merger discussions with TMTG several months before filing the paperwork to go public in late 2021." That's contrary to DWAC's own statements in those filings that "neither DWAC nor its officers and directors had had any discussions with any potential target companies prior to the IPO."

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Source Fool.com