(SAN FRANCISCO, Calif.) – On September 22, San Francisco City Attorney David Chiu announced that he has filed a lawsuit against Trump Media & Technology Group Corp., alleging that the company’s Truth API service facilitates insider trading.
Launched August 1, Truth API provides paying subscribers with posts from Truth Social’s most influential accounts, including President Donald Trump’s account, approximately 50 milliseconds before they are made available to other users. According to the City Attorney’s Office, subscribers can pay up to $100,000 per month for the service. More than 10 customer’s have signed up, primarily used by high-frequency trading firms.
“This business scheme has turned public trust into private profit. This is corruption, plain and simple,” said San Francisco City Attorney David Chiu, in an announcement.
Photo Credit: City of San Francisco / San Francisco City Attorney David Chiu announces lawsuit against Truth Social in a video statement.
The lawsuit alleges that the service allows trading firms to obtain advance access to government announcements that can significantly affect financial markets. The City Attorney’s Office cited Trump’s August 1 announcement that he was calling off a planned strike on Iran, which was followed by a 5% decline in oil prices. The office also cited an August 21 announcement concerning tariff-free ground beef imports that was followed by a decline in cattle futures.
Photo Credit: Truth Social / @realDonaldTrump / President Donald J. Trump announces cancelled strikes against Iran on his Truth Social account.
In a press release announcing Truth API, interim CEO of Trump Media Kevin McGurn said, “Markets already move on Truth Social posts…Truth API delivers a direct, licensed, real-time feed of the platform’s most market-moving [posts] while advancing our strategy to monetize proprietary assets through a high-margin, recurring revenue stream.”
Trump remains the company’s largest shareholder, owning approximately 41% of Trump Media through a revocable trust in which he is the sole beneficiary, according to the City Attorney’s Office press release. “This means that [Trump] personally benefits from this media scheme,” says Chiu.
Photo Credit: Bloomberg / A graph suggesting that Trump’s posts about oil prices immediately cause short-term drops.
The lawsuit alleges violations of federal ethics and securities laws and claims that Trump Media’s conduct constitutes an unlawful and unfair business practice under California’s Unfair Competition Law. The City Attorney’s Office is seeking to stop the company from operating Truth API or similar services in violation of California law, as well as civil penalties and associated costs.
The service has also drawn criticism from lawmakers in both political parties. Republican Senators Bill Cassidy and Lisa Murkowski have questioned the practice of selling access to presidential communications, with Murkoski commenting, “You can’t use the presidency to enhance your own personal wealth.” Democratic Senators Elizabeth Warren and Adam Schiff have asked the Securities and Exchange Commission to investigate whether the service violates market-manipulation laws.
The case, People of the State of California v. Trump Media & Technology Group Corp., was filed in San Francisco Superior Court.
The allegations in the lawsuit have not been adjudicated, and the filing does not itself establish that Trump Media violated the laws cited in the complaint.
To add to or correct any information in this report, please contact me at naomi.h@lead4earth.org or leave a comment below with your thoughts.
0
0
Comments