Trump Media & Technology Group, which operates the Truth Social platform, sent a letter to NASDAQ raising concerns about potential market manipulation of its stock.
The company noted its ticker “DJT” appears on NASDAQ’s threshold list for stocks experiencing significant short selling failures.
“I write to bring your attention to potential market manipulation of the stock of Trump Media & Technology Group Corp. (‘TMTG’), which operates the Truth Social platform and has traded on the Nasdaq Stock Market under the ticker ‘DJT’ since March 26, 2024,” the letter reads.
Trump Media CEO Devin Nunes argued in the letter that some traders may be relying on illegal “naked short selling” where shares are sold without being borrowed.
Nunes requested NASDAQ take steps to ensure compliance with regulations and prevent the lending of non-existent shares by brokers, citing a need to protect retail investors.
“This is particularly troubling given that ‘naked’ short selling often entails sophisticated market participants profiting at the expense of retail investors,” Nunes wrote.
The letter added, “Reports indicate that, as of April 3, 2024, DJT was “by far’ ‘the most expensive U.S. stock to short,’ meaning that brokers have a significant financial incentive to lend non-existent shares. Data made available to us indicate that just four market participants have been responsible for over 60% of the extraordinary volume of DJT shares traded.”
“In light of the foregoing, and Nasdaq’s obligation and commitment to protect the interests of retail investors,3 please advise what steps you can take to foster transparency and compliance by ensuring market makers are adhering to Reg SHO, requiring brokers to disclose their ‘Net Short’ positions, and preventing the lending of shares that do not exist,” Nunes wrote. “TMTG looks forward to assisting your efforts.”
The letter listed four major financial firms – Citadel Securities, VIRTU Americas, G1 Execution Services, and Jane Street Capital – as responsible for over 60% of unusually high DJT trading volume, according to Trump Media’s data.
NASDAQ was asked to foster transparency and compliance to curb potential exploitation of retail investors.
