Rep. Devin Nunes, R-Calif., ranking member of the House Intelligence Committee, speaks during an impeachment inquiry hearing in Washington on November 13, 2019.
Andrew Haller | Bloomberg | Getty Images
Trump Media Chief Executive Devin Nunes on Tuesday urged House Republican committee leaders to investigate possible “illegal manipulation” of the company’s stock.
Nunes himself served as House Republican Chairman letter They were asked to investigate “unusual trading” in the stock to gauge the extent of the alleged manipulation and “whether any laws, including RICO statutes and tax evasion laws, were violated.”
The request further strengthens Nunes’ claim that Trump Media, which trades as DJT, is an apparent victim of “naked short selling,” which is the sale of a company’s stock without first borrowing it. way of doing.
Trump Media, which began trading on Nasdaq on March 26 after completing a lengthy public merger, was far and away the most expensive U.S. stock to short as of early April.
As a result, brokers “have a strong financial incentive to lend out shares that don’t exist,” Nunes wrote.
He wrote that the investigation was necessary to protect the company’s shareholders and ensure “any perpetrators of illegal activity are held accountable.”
The executive sent a letter to four House committee leaders: Financial Services Chairman Patrick McHenry (R.N.), Judiciary Chairman Jim Jordan (R-Ohio), Ways and Means Chairman Jason Smith (R-Mo.) and Oversight Committee Chairman James Comer, RN -Ky.
Spokespeople for the four chairmen did not immediately respond to CNBC’s request for comment on Nunes’ letter.
The letter comes as shares of Trump Media continue to fall in a volatile trading session. holds a majority stake.
DJT surged in its first trade, hitting a high of nearly $80 per share, but has since lost more than half its value.
The stock fell nearly 5% in early trading Wednesday, but turned positive before noon and was trading around $33 a share.
DJT price over the past month
Nunez’s letter also heightened tensions with Citadel Securitiesa capital markets firm founded by Republican megadonor Ken Griffin.
Nunes mentioned Citadel Securities in an April 18 letter to Nasdaq CEO Adena Friedman, warning that DJT “appears under Nasdaq’s ‘Reg SHO threshold. He mentioned Citadel Securities again in his new letter to Congress.
The Reg, or Regulatory SHO List, is designed to monitor short selling and flag problems that may arise in the delivery of securities to the parties to the transaction. But the SEC notes on its website that “there are many legitimate reasons why a broker-dealer fails or is unable to deliver securities on the settlement date.”
Nunes told Friedman in the letter that more than 60% of DJT stock is traded by just four market participants, including Citadel Securities.
The company issued a statement in response, calling Nunes “a known loser who is trying to blame ‘naked short selling’ for the stock’s decline.”
“Nunez is exactly the person Donald Trump would take a shot at,” a Citadel Securities spokesman added in a statement Friday.
A Trump Media spokeswoman countered: “Citadel Securities is a corporate giant that has been fined and reprimanded for an incredible array of violations, including issues related to naked short selling, and is known for its… It is famous for deceiving ordinary retail investors at the request of ordinary retail investors.
Representatives for Citadel Securities did not immediately respond to a request for comment.
About The Author
