**Trump Media CEO Unleashes Inquiries into Suspected Short Selling Irregularities**
In a bold move to safeguard投资者, Trump Media CEO Devin Nunes has called upon the leadership of influential House committees to investigate eight financial institutions for their potential involvement in questionable short selling activities involving DJT, a publicly traded company in which former President Donald Trump holds a substantial stake.
Concerns of Malpractice and Fraud
Nunes expressed grave concerns about the possibility of wrongdoing and legal transgressions, including violations under the Racketeer Influenced and Corrupt Organizations Act (RICO) and tax evasion statutes. He urged the committees to gather documents and testimonies from the named firms to ascertain the truth and protect the interests of retail investors.
Short Selling under Scrutiny
Nunes’ investigation focuses on short selling, a trading strategy involving borrowing shares of a company’s stock and selling them in the market, with the expectation of buying them back at a lower price and returning them to the lender for a profit. However, concerns have been raised about possible “naked” short selling, where sellers do not actually borrow the shares before selling them.
Impact on Trump Media
Nunes believes such illicit short selling practices may have contributed to the recent decline in Trump Media’s share price, despite the company’s solid financials and significant growth potential. He urged the company’s shareholders to take steps to block the use of their shares for such manipulative trades.
Potential Legal Consequences
The CEO highlighted the ongoing presence of DJT on Nasdaq’s Reg SHO Threshold List, which indicates persistent settlement failures and heightened responsibilities for market participants. He emphasized that the SEC’s guidance clearly states that broker-dealers must pre-borrow securities for short sales and should not re-use locates for intra-day buy-to-cover trades.
Market Manipulation Allegations
Nunes’ inquiries come amid allegations of market manipulation involving Trump Media shares. In a previous letter to Nasdaq’s CEO, he named four market-making companies as being responsible for a significant portion of the stock’s trading volume. While he stopped short of accusing them of wrongdoing, at least one company vehemently denied the allegations.
Protecting Investor Interests
Nunes’ actions underscore his determination to address the concerns of investors and ensure a fair and transparent market. He emphasized the importance of protecting ordinary retail investors from potentially predatory practices and preserving the integrity of the financial system.
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Data sourced from: cnbc.com
