Bankruptcy filings reveal new info on Trump Media DJT shareholder and affiliate that allegedly conducted naked short selling–a practice prohibited in the U.S.
Next month Donald Trump will become President of the United States. Again. His first term in office was filled with financial conflicts of interest as his many businesses made money off of anyone seeking to buy Trump’s favor. Trump’s second term in office promises to not only repeat but to escalate the conflicts of interest – in large part because Trump now has several new types of business in addition to old school hotels, golf courses and licensing deals. Now Trump will benefit from a crypto project called World Liberty Financial and from his Truth Social media business, which is part of ‘Trump Media & Technology Group’ – a company now trading publicly under the stock symbol DJT.
This article provides an update on one of the investors in Trump Media & Technology Group and, based on bankruptcy filings reveals new details about this investor, helps fill in a clearer picture of who is supporting Trump’s business, and also highlights how tangled and inter-connected the web of people and businesses around Trump are.
Trump’s publicly traded Trump Media & Technology Group (symbol DJT)
In October 2021, Donald Trump announced plans to merge Trump Media & Technology Group and social media platform Truth Social with publicly-listed Digital World Acquisition Corp (DWAC). I published this chart on the network around Trump’s planned partner DWAC run by Patrick Orlando. For years the deal to merge DWAC and TMTG has been mired in law suits. Several early DWAC investors pleaded guilty to insider trading including Bruce Garelick and Michael Shvartsman, who I covered here.
In March 2024 Trump Media & Technology Group merged with Digital World Acquisition Corp and started publicly trading under the symbol DJT. Trump owns the majority of the shares in DJT and his wealth increased by billions of dollars after his small over-valued media company started trading publicly. With Trump about to enter the White House yet again, without any pretense that he will avoid conflicts of interest, it is clear that anyone who wants to buy Trump’s favor will be investing heavily in his business ventures, including publicly traded DJT.
I have been closely following DWAC and TMTG and following the investor money flowing into DJT. In April I published this article on people and entities that owned shares and warrants in Trump Media that could be sold at a future date. One notable owner was Pam Bondi, Trump’s pick for U.S. Attorney General, who had over 100,000 shares then valued at over $4 million – a stake I reported on and that should be probed to understand her financial ties to Trump as part of her confirmation hearing.
However, there was another even larger owner of DJT shares, that I reported on in the same story, who was intriguing to me because I could not figure out their identity.
DJT shareholder Washington Muse Investments
This April DJT filing listed a shareholder – Washington Muse Investments – that had over 4 million shares and 1.3 million warrants. After Trump and two other shareholders with over 5% ownership, Washington Muse Investments was one of the next-largest owners of DJT when it went public. Yet there was no information publicly available on the company. Until now.
Washington Muse is affiliated with All Blue Capital, one of three firms that provided $50 million in financing to Trump partner DWAC
I reviewed several new bankruptcy filings from last week that reveal that Washington Muse Investments was formerly known as All Blue Investments North Star 2 SPC. Information further on in this article describes how Washington Muse is one of several entities that were operated in coordination by common directors – including Matt Novak, the managing partner of All Blue Capital. (Note: see the end of this version of the article to view the bankruptcy filing pdf for All Blue Investments North Star 2 SPC that is referenced periodically below).
Earlier this year the Financial Times reported on how the potential windfall for Donald Trump was impacted by litigation – some of it involving DWAC which had dismissed Patrick Orlando a year earlier. The article highlighted that in addition to Trump there were three hedge funds that provided $50 million in financing that would also potentially make a huge profit.
Beyond Trump’s potential payout from the deal, three hedge funds also stand to make a significant profit. Anson Funds, Mangrove Partners and All Blue Capital, which agreed to participate in a $50mn convertible debt offering this year after other funds had walked away, are sitting on more than $400mn in gains as of DWAC’s closing price of $42.81 on Thursday, according to calculations by the Financial Times.
All Blue Capital, which was part of the $50 million financing for DWAC earlier this year, is run by Managing Partner Matt Novak.
In 2022 All Blue Capital had announced that their new global headquarters would be based in Dubai in the United Arab Emirates. They also announced the launch of their North Star 1 fund in the British Virgin Islands.
This 2023 Form D filing for a $10 million offering for BVI-based All Blue Investments North Star 1 Ltd lists Matthew Novak and Daniel Cookson as executive officers and directors.
Below are some details on the bankruptcy filing for All Blue Investments North Star 1 Ltd – that per the Form D filing above is run by Matt Novak and Daniel Cookson. It appears that while Novak’s company All Blue Capital was one of three firms to provide $50 million in financing to DWAC as it was merging with Trump Media – some entities closely related to All Blue Capital and Matt Novak were losing money, filing for bankruptcy and as noted further on, allegedly engaging in naked short selling which left several business partners to cover tens of millions in losses.
If the All Blue Capital and Novak-related Washington Muse Investments is still holding 4,166,666 shares of DJT noted in the April 2024 filing, based on the recent DJT price of $35 the shares are worth over $145 million (which does not include 1.38 million warrants). This article only touches on some highlights from the bankruptcy filings and it will be interesting to see how the bankrtupcty proceedings impact the ownership stake in DJT.
The companies in the bankruptcy filings and how they are connected
A December 13, 2024 filing in the Chapter 15 case for All Blue Investments North Star 1 Ltd, et al (Case 24-23015-CLC) describes two companies as the ‘foreign debtors’ – All Blue Investments North Star 1 Ltd (NS1) and All Blue Investments Management Ltd (ABIM). Note: see the full filing pdf at the end of this article.
All Blue Investments North Star 1 Ltd (NS1) – was incorporated in the BVI on March 4, 2022 and is a professional fund (open-ended investment fund permitted to issue shares). The sole holder of single management share is Elea Investments Ltd. fka All Blue Investments (DIFC) Ltd. Daniel Cookson is sole shareholder and director of All Blue Investments and Matthew Novak was a director of All Blue Investments until March 2024.
All Blue Investments Management Ltd (ABIM) – was incorporated in the BVI on November 1, 2023 and Cookson and Novak are both directors.
Other related companies are also described:
Red Rowan Investments Ltd – a company registered in the Cayman Islands on November 30, 2021.
Washington Muse Investments SPC f/k/a All Blue Investments North Star 2 SPC (NS2) – an exempt segregated portfolio company registered in the Cayman Islands on August 22, 2022. NS2 established three segregated portfolios.
The filing notes that
Directors share common control of NS1, ABIM, Red Rowan and NS2.
Liquidators believe operations of the companies were coordinated.
Red Rowan and NS1 (All Blue Investments North Star 1 Ltd) effectively operated as a single entity.
NS2 (Washington Muse) operated as sister fund to NS1 (All Blue Investments North Star 1 Ltd).
ABIM provided investment management services to NS1 and NS2.
The details on these overlapping companies are somewhat confusing – but the overall gist seems to be that they were interrelated and largely run by Novak and Cookson.
As noted, Matt Novak’s All Blue Capital was one of three firms that provided $50 million in financing to DWAC earlier this year as it was finalizing the merger with Trump Media.
As reported here, Washington Muse Investments – one of the largest shareholders of Trump’s DJT stock and per the April filing listed in the ‘Alternative Financing Shares’ section – appears to be the most recent entity to hold the shares related to the All Blue Capital portion of the $50 million financing.
In addition, the following sections report that Red Rowan, which was part of an earlier investor list for DWAC, is also affiliated with the bankrupt entities. And, separately, one of the entities filing bankruptcy had entered a loan agreement for up to $2.9 million to a company run by former DWAC head Patrick Orlando.
There are many overlapping connections among Matt Novak and Daniel Cookson’s affiliated entities and Patrick Orlando, DWAC and Trump Media. And like many Trump-linked business partners that have engaged in shady transactions – Novak and Cookson’s companies were alleged by the liquidators to have engaged in a practice called naked short-selling, which is prohibited in the U.S., and which left several broker-dealers with over a hundred million dollars in losses to cover.
Red Rowan was listed as an early PIPE investor in Trump’s partner Digital World Acquisition Corp
A 2022 filing for Digital World Acquisition Corp, which at the time planned to merge with Trump Media & Technology Group, listed over 40 third party investors in a $1 billion PIPE (private investment in public equity).
The PIPE deal was later aborted, but it is notable that one of the five largest PIPE investors listed was Red Rowan Investments Ltd with 10,000,000 shares. There was nothing in the filing indicating that Red Rowan was linked to All Blue or Matt Novak.
Instead, the footnote says that “Paolo Zonno has voting and dispositive control over the shares held by Red Rowan Investments Ltd”.
There is a Paolo Zonno listed as an officer of three U.K. companies; PZ Financial Solutions Ltd, IBP Markets Ltd (which was restricted from trading in the UK in 2023), and Blue Spear Investments Ltd. Blue Spear was incorporated in April 2024, is owned by Giovanni Zonno, and incorporation documents list initial shareholder Wolf Global Holding FZ Ltd in the UAE. However, I could not locate any information outside the 2022 filing with Red Rowan and Zonno in the footnote explaining his role working with Novak or All Blue entities.
One company in the bankruptcy proceeding had agreed to provide a loan of up to $2.9 million to Patrick Orlando’s Big 5 Sponsor LLC
A section of the bankruptcy filing described that in 2022 All Blue Investments North Star 1 Ltd (NS1) as lender had entered a convertible loan agreement with a Florida company called Big 5 Sponsor LLC run by Patrick Orlando. Under the agreement NS1 extended to Big 5 Sponsor loans of up to $2.9 million.
I searched the SEC database and did not find any filings that mention ‘Big 5 Sponsor’. However several filings mention ‘Big 4 Sponsor LLC’ also run by Patrick Orlando. Big 4 Sponsor LLC is the company that owns Patrick Orlando’s interest in BurTech Acquisition Corp. and Big 4 Sponsor has a 2.4% ownership interest in Solidion Technology, Inc. (formerly Nubia Brand International). There is nothing showing that Big 4 Sponsor is connected to Big 5 Sponsor, but both are vehicles used by Patrick Orlando in some of his SPAC deals (in which Orlando runs Special Purpose Acquisition Companies known as SPACs, in order to combine with a private company to take them public).
It is not clear if Big 5 Sponsor LLC or the loan agreement was connected to DWAC or Trump Media, but it appears that Patrick Orlando was working with the All Blue Capital entities on multiple fronts.
One other example is that in 2023 All Blue Capital was involved in financing another deal involving a proposed business combination between Immersed Inc. and Maquia Capital Acquisition Corp. where Patrick Orlando had previously served as a director. The business combination did not happen, but included many people that overlap with Orlando’s other SPAC deals.
The bankruptcy filing describes ‘Naked Short Selling Trades’ by the foreign debtors which left other broker-dealers with over $126 million in losses to cover
The filing described how All Blue Investments Management Ltd (ABIM) conducted numerous naked short selling trades and did not have sufficient cash to cover the trades, leaving trading partners to cover tens of millions of dollars in losses.
Between December 2023 and March 2024, ABIM conducted a series of trades with counterparts through Avalon Capital Partners Limited, Seaport Global Securities LLC, Mizuho Securities USA LLC, and Haitong International Securities Company Limited (together the “Broker-Dealers”). Many of the trades conducted by ABIM with these Broker-Dealers constituted naked short selling.
This May 2024 story reported on big losses for Nomura and Mizuho caused by All Blue Capital, and earlier this year Mizuho Securities sued All Blue.
Nomura Holdings and Mizuho Financial Group are facing more than $100 million of potential losses tied to a series of failed stock trades made by investment fund All Blue Capital…All Blue, led by trader Matt Novak, made a series of wrong-way short bets with multiple counterparties earlier this year and is allegedly unable to settle the trades, according to New York legal filings and people familiar with the matter. Two units of the fund were placed into liquidation in the British Virgin Islands in March, the filings show.
A company affiliated with All Blue is accused in a lawsuit of backing out of financing $5 million for a SPAC deal with Howard Lutnick’s Cantor Fitzgerald
One item I found in my research highlights how interconnected the people and companies doing business with Trump can be.
While researching All Blue Capital I came across UAE-based All Blue Falcons FZE run by Matt Novak and a lawsuit in which a company AEye, Inc (formerly known as CF Finance Acquisition Corp. III) was suing All Blue Falcons FZE.
CF Finance Acquisition Corp was familiar to me because I had created this chart showing connections between DWAC, Trump Media & Technology Group and Rumble – which had merged with CF Acquisition Corp VI, run by Howard Lutnick. Lutnick is the CEO of Cantor Fitzgerald and Trump’s pick for commerce secretary, and is also a co-founder of the Trump sponsored crypto project World Liberty Financial.
The AEye, Inc. v All Blue Falcons FZE lawsuit relates to a dispute over a 2021 agreement in which All Blue Falcons FZE agreed to purchase $5,000,000 after CF Acquisition III combined with AEye, Inc. AEye sued All Blue Falcons FZE for breach of the contract and not making the $5 million purchase.
There is no indication that this transaction is connected to the DWAC and Trump Media deal – but it shows how interconnected the entities and people are in the Trump orbit.
As Trump approaches a new term in office with little regard for conflicts of interest it is essential to continue following the money around Trump, his family and associates. The recent bankruptcy filings for All Blue North Star help fill in new information on a large investor in Trump Media – Washington Muse – and reveals other financial connections with DWAC and Orlando.
All Blue Investments North Star 1 Ltd, et al Case 24-23015 – Doc 6 – Filed 12/13/24
See the end of version of the article to view the pdf of the main filing referenced earlier with information on the various All Blue entities, operations involving Digital World Acquisition Corp., Trump Media & Technology Group, and Patrick Orlando.
Keep digging! The fleecing of the US gets clearer through your work!
My oh my, wouldn’t it be nice to bundle them all for Christmas and deliver in the Confirmation Hearings.