By Jacob Adelman
Paul Atkins, the newly installed chairman of the Securities and Exchange Commission, has been thrust into the middle of a legal fight involving the parent of Donald Trump's Truth Social platform.
Defendants in a lawsuit filed by Trump Media and Technology Group in federal district court in Sarasota, Fla. are seeking information from Atkins and the consulting firm he founded, Patomak Global. One defendant's filings asks for records about what his attorneys characterize as Patomak's engagement with Trump Media, whose stock is about 40% owned by the president and his family.
The new court filings could reopen a debate about what some say are the SEC chair's conflicts of interest stemming from his time running Patomak. Atkins founded Patomak, which helps companies navigate U.S. regulations, in 2009 after an earlier stint at the SEC as one of its Republican-appointed commissioners.
Atkins' professional relationships came up during the SEC chairman's Senate Banking Committee confirmation hearing in March.
During the session, Sen. Elizabeth Warren (D., Mass.), the committee's ranking member, referred to Atkins "financial conflicts of interest" as "breathtaking."
At the time, Atkins disclosed a recent client list that included crypto brokerage FalconX, high-frequency trading giant Virtu, the Singapore-government-owned Temasek investment firm, and the Options Clearing Corporation, which handles the settlement of all U.S. listed options and some futures contracts. Trump Media wasn't among the companies listed.
The disclosure -- which covered Atkin's major sources of income since the start of 2023 -- said the identities of four Patomak customers were covered by "confidentiality obligations."
As a publicly traded company, Trump Media is regulated by the SEC. In the coming months, the commission is set to decide on whether to approve the company's proposal for a Truth Social Bitcoin ETF, an exchange-traded--fund backed by cryptocurrency holdings.
Last month, the commission rejected a "settlement in principle" with one of the defendants in the Florida litigation, businessman Patrick Orlando, who had also been under investigation by the SEC, according to court records.
It is attorneys for Orlando who have demanded records from Patomak relating to any Trump Media "engagement." They alleged in a separate filing that Trump Media had sought to "disrupt" the agreement with the SEC.
Asked about Patomak, the rejection of Orlando's settlement deal, and the company's pending application for a Bitcoin ETF, Trump Media told Barron's that its "meritless inquiry appears to have been prompted by biased sources with a vested interest in ongoing litigation."
"Any assertion or implication that Trump Media engaged Patomak Global Partners or communicated with the Securities and Exchange Commission regarding a proposed settlement with Patrick Orlando would be false, defamatory, and legally actionable," the company said.
Asked for comment, a White House spokesperson said it would defer to Trump Media.
An SEC spokesperson told Barron's that Atkins is in compliance with the ethics agreement he reached during his Senate confirmation process.
"He has met or exceeded the same standard that the Committee has applied to prior nominees of both parties to serve as SEC Chairman," the spokesperson said. "Chairman Atkins takes seriously the obligations of SEC Chairman and is upholding the oath to faithfully discharge his duties, including the commitments that he made in his ethics agreement."
Patomak didn't respond to questions.
Adam Schwartz, an attorney for Orlando, told Barron's that his team was disappointed by the commissioners' rejection of the proposed deal with his client, which had been recommended by the agency's enforcement staff. It is rare for commissioners to overrule enforcement staff recommendations for settlement, said Schwartz, a specialist in securities litigation who previously worked as an SEC attorney.
He declined to comment further, including about his team's filing and why Atkins is on their potential witness list. Other defendants in the suit, Trump Media co-founders Wesley Moss and Andrew Litinsky, filed a separate proposal to subpoena Patomak. Their attorneys didn't respond to messages from Barron's.
In his written response to questions from the Senate Banking Committee, which oversaw his confirmation, Atkins said he provided "additional client information" to committee members that wasn't included in the document.
Spokespeople for Warren and Sen. Tim Scott (R-S.C.), the Banking Committee chairman, didn't respond to questions about whether Trump Media was named as a client in that material.
Danielle Caputo, an ethics expert at the Campaign Legal Center watchdog organization, says Atkins was under no legal obligation to publicly name past clients and that it isn't unusual for nominees to designate relationships as confidential in their disclosures.
Still, she says, "it definitely raises questions for the general public of whose interests are being represented in the government."
Federal rules require executive appointees to recuse themselves from any decisions that involve people or entities that had been clients over the past year. Recent presidents, including Trump during his first administration, extended that window to two years via executive orders. Trump hasn't ordered the extension in his second term.
One client disclosed by Atkins during his confirmation, financier John Fife, had been charged by the SEC in 2020 with acquiring penny-stock shares through discounted convertible-note deals and selling them without registering as a dealer. Fife denied the allegations. In June, the SEC filed papers to dismiss its claim "in the exercise of its discretion and as a policy matter."
Messages for Fife and his firm, Chicago Venture Partners, weren't returned. In 2007, Fife agreed to a $529,000 judgment to settle an earlier SEC claim that he and an affiliated firm carried out a fraudulent market-timing scheme involving variable annuity contracts. In the agreement, Fife neither admitted nor denied the agency's findings.
During Aktins' confirmation hearing, Warren and other Democrats sharply questioned the nominee about his industry ties, expressing doubts about whether he would discharge his duty to regulate former clients and others in the crypto and fintech industries.
"Patomak counts every kind of financial firm subject to the SEC's rules among its clients: banks, asset managers, brokers, exchanges, fintechs and crypto companies," Warren said. "If you're confirmed, you will be in a prime spot to deliver for all those clients who've been paying you millions of dollars for years."
Atkins said at the time that he was following government ethics rules. He committed to selling his stake in Patomak once confirmed, among other divestments.
Orlando was the founder of Digital World Acquisition Corp., the special-purpose acquisition company -- or SPAC -- that took Trump Media public through a merger.
On July 18, Orlando's legal team told the court it planned to subpoena Patomak. It listed documents and communications "concerning your engagement" with Trump media among the records that it sought. It also listed communications between Patomak and the SEC concerning the agency's past probe of the SPAC transaction. Atkins was also named as a potential witness in an email submitted as an exhibit to a separate court filing.
SPACs are essentially pots of investor money that trade publicly. SPAC managers use the cash to acquire private companies that take over their listing on a stock exchange. SEC rules bar managers from identifying their acquisition targets before the SPAC is listed.
In July 2023, the SEC said Digital World violated those rules by initiating acquisition talks with Trump Media before its IPO. It announced an $18 million deal to settle the claims.
Trump Media paid the fine with funds that were generated through its merger with Digital World, which closed in March 2024, according to court records.
Two months later, the SEC sued Orlando individually in U.S. District Court in Washington, D.C. over allegations that he broke the law by not disclosing his talks with Trump Media executives before taking the Digital World SPAC public.
Trump Media is separately suing Orlando for more than $100 million over similar claims, alleging that his handling of the merger constituted a costly breach of his fiduciary duties.
Last month, SEC commissioners rejected the deal to drop the agency's claim against Orlando in exchange for his agreement not to seek reimbursement of his legal fees, according to court records.
The rejection followed what Orlando's attorneys had previously described in court records as Trump Media's efforts to scuttle that settlement over apparent concerns that it could weaken its own claims against him.
Orlando has asked for the SEC and Trump Media case against him to be dismissed, arguing that his contacts with Trump's venture before Digital World's IPO didn't violate the law.
Write to Jacob Adelman at jacob.adelman@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
August 15, 2025 14:03 ET (18:03 GMT)
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