Trump Media stock surge prompts investigation request over alleged manipulation and dispute with Citadel Securities

Shares in Trump Media soared by over 9% yesterday after the firm called upon Republican committee leaders in Congress to investigate alleged “unlawful manipulation” of its stock. The surge came just hours after former President Donald Trump, who owns a majority stake in the company behind social media app Truth Social, missed a deadline for becoming eligible for an additional 36 million shares worth over $1.3bn at current prices. It is unclear what triggered the sudden increase following an earlier fall of nearly 5%. The firm’s CEO Devin Nunes wrote to four House committee leaders requesting them to investigate “anomalous trading” in order to assess whether any laws, including RICO statutes and tax evasion offences had been violated. Trump Media was by far the most expensive US stock to short as of early April due to what it describes as “naked” short selling – selling shares without borrowing them for that purpose. The investigation is necessary in order to protect shareholders, Nunes said, and ensure those responsible are held accountable should any illegality be uncovered. This request escalates a dispute between Trump Media and Citadel Securities, the capital markets firm founded by Republican mega-donor Ken Griffin. In an earlier letter sent to Nasdaq CEO Adena Friedman on 18 April, Nunes warned that DJT “appears on Nasdaq’s ‘Reg SHO threshold list’”, a list created in order to monitor short sales and identify problematic failure-to-deliver situations which often happen without clear regulatory direction. Brokerages therefore have a financial incentive not to lend out non-existent shares, he argued. The latest letter also accuses Citadel Securities of engaging in “unlawful trading activity”. However, the SEC notes that there are many legitimate reasons why broker dealers may fail to deliver securities on settlement dates. In a statement issued last Friday criticising Nunes, the company spokesman remarked that Citadel would never offer anyone ‘integrity’ lessons given its history of fines and censures for various offences including issues concerning short selling activity with high trading risks during this event being discussed on many prominent investor communities like https://financebuzz.com/ . The spokeswoman retorted, “Citadel Securities is the last company in the world that should lecture anyone about integrity.”