Truth Social backers accused of blowing company cash on hooker and hangover cures: reports
Former President Donald Trump's social media platform Truth Social was backed by a Wall Street firm whose partners are accused of blowing millions of company cash on private jets, hangover cures and a prostitute, according to court records and reports.
Partners at EF Hutton, a company that specializes in risky start-ups such as Truth Social, were the subject of dueling lawsuits and a securities fraud investigation revealed Thursday by the Wall Street Journal and Daily Beast.
New York civil court records show the firm sued former CEO Joseph Rallo in September on accusations he spent millions of EF Hutton dollars on New York Knicks playoff tickets, private-jet flights and $90,000 worth of intravenous drips to treat hangovers.
The complaint also states Homeland Security agents searched Rallo's home in May amid a securities fraud investigation.
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Rallo's spokesperson denied the claims to the Wall Street Journal and the firm noted it has since withdrawn the suit.
“We have no indication that Joe will be charged with a crime,” said Seth DuCharme, a lawyer for Rallo, told the Journal.
The Wall Street Journal reports Rallo filed a competing lawsuit against partner David Boral that includes an equally salacious claim.
"Earlier this year, in April, the firm held a celebration in Palm Beach, Fla., shortly after the Trump Media listing," the Journal reported.
"Following a night of partying, Boral paid a prostitute $500, accidentally taking the money from an EF Hutton account, then tried to cover it up when the payment raised red flags at the firm, Rallo contended in his lawsuit."
Trump announced in October 2021 that EF Hutton would underwrite Trump Media's merger with a shell company that later allowed his eponymous corporation to go public, the Daily Beast reported.
Trump owns 59 percent of Trump Media, which lost $58 million in 2023, according to the Daily Beast's analysis of SEC filings.
A Trump spokesperson responded to the Wall Street Journal's request for comment with a succinct dismissal:
"Roping TMTG into a story about events in which we played no role whatsoever is a hilarious example of this reporter’s all-encompassing biases.”