July 19, 2024

The Battle of the Stocks: Unraveling the Controversy Surrounding DJT Shares

Devin Nunes, CEO of Trump Media & Technology Group, has raised alarms over what he describes as escalating trading irregularities involving the company’s stock, symbolized as DJT. This concern was detailed in a recent correspondence addressed to the CEO of Nasdaq Inc. (NDAQ). In his communication, Nunes reported that the abnormalities in trading have intensified, prompting him to seek assistance from Nasdaq in potentially investigating these matters.

In the letter dated Tuesday, Nunes highlighted his requests to the Financial Industry Regulatory Authority (FINRA), urging them to inspect trading data for DJT stock from April 29 to June 3. He specifically pointed out major financial entities like Citadel Securities, UBS, and Cowen and Co. as focal points for this investigation. Additionally, Nunes has requested the cooperation of Nasdaq in facilitating any congressional or other probes that might involve these firms, by providing pertinent data swiftly.

Trump Media’s stock has experienced significant volatility, marked by a sharp rise in March following its public debut via a merger with a special purpose acquisition company. This surge was short-lived, however, as the stock plummeted following a guilty verdict against former President Donald Trump last week.

The core of Nunes’ concerns centers on alleged “naked” short-selling—a practice where stocks are sold short without securing the actual shares for borrowing. Such actions can lead to “failures to deliver,” a scenario where parties fail to finalize their trading commitments. Recent data from the Securities and Exchange Commission indicate that these failures have been alarmingly frequent, with instances of undelivered DJT shares surpassing 1 million on several days within the first half of May.

Key Takeaways:

  1. Escalating Trading Irregularities: The CEO of Trump Media has flagged growing concerns regarding the trading of DJT shares, citing increasing anomalies.
  2. Calls for Investigation: Nunes has approached both Congress and regulatory bodies to scrutinize potential manipulations involving key financial players.
  3. Stock Volatility: The stock of Trump Media has been notably unstable, reflecting broader uncertainties and reactions to political events.
  4. Regulatory Scrutiny: The suspected irregular practices like naked short-selling are under scrutiny, with recent SEC data supporting claims of frequent delivery failures.

Conclusion: The unfolding situation around Trump Media’s stock offers a stark illustration of the complexities and potential pitfalls within financial markets. As regulatory bodies and Congress delve into these allegations, the outcomes could have significant implications for market practices and investor confidence. Transparency and stringent oversight remain crucial in maintaining the integrity of financial markets.

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