Rep. Devin Nunes, R-Calif., ranking member of the House Intelligence Committee, speaks during an impeachment inquiry hearing in Washington, Nov. 13, 2019.
Andrew Haller | Bloomberg
Trump media CEO Devin Nunes on Tuesday urged House of Representatives Republican commission leaders investigating the company’s possible ‘illegal manipulation’ of stocks.
Nunes, himself the House Republican chairman, asked the letter to investigate “unusual transactions” in stocks to gauge the extent of the alleged manipulation and “whether any laws, including the RICO Act and the Tax Evasion Act, were violated.”
The request is doubled Nunez claims Trump Media, which trades under the symbol DJT, is an apparent victim of “naked short selling,” the practice of selling a company’s stock without first borrowing the company’s stock.
The Trump media started after the Nasdaq completed a long public merger on March 26, making it arguably the most expensive U.S. stock to short in early April.
As a result, brokers “have a strong financial incentive to lend 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 CEO sent a letter to four House committee leaders: Financial Services Chairman Patrick McHenry (R-RN), Judiciary Chairman Jim Jordan (R-OH), 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 came as shares of Trump Media, which created social media app Truth Social and is majority-owned by former President Donald Trump, continued to trend lower during a choppy trading session.
DJT rose in its first trade, reaching a high of around $80 a share, but has since lost more than half its value.
The stock fell about 5% in early trading Wednesday, but turned positive before noon and was trading around $33 a share.
DJT price last month
Tensions have also risen over Nunez’s letter to Citadel Securities, a capital markets firm founded by Republican megadonor Ken Griffin.
Nunes cited Citadel Securities in an April 18 letter to Nasdaq CEO Adena Friedman, warning that DJT “appears below Nasdaq’s ‘reg SHO threshold. “This indicates illegal business activity,” he said, citing Citadel Securities again in his new letter to Congress.
The REGI, or regulatory SHO list, is designed to monitor short sales and flag problems in the supply of securities to trading parties. But the SEC notes on its website that “there are many valid reasons why a broker-dealer may fail or be 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 wants to blame his actions on ‘naked short selling’.” Share price falls
“Nunez is exactly the kind of person who would take a shot at Donald Trump on The Apprentice,” a company spokesperson said. Citadel Securities added in a statement on Friday.
A Trump media spokesperson countered: “Citadel Securities is a corporate giant that has been fined and reprimanded for incredible violations, including issues related to naked short selling, known for defrauding ordinary retail investors at their command. .”
Representatives for Citadel Securities did not immediately respond to requests for comment.
Tags: Trump Media CEO Urges House Republican Leaders Investigate Potentially Proficient DJT Stock
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