Nunes sends third letter to Congress about potential manipulation of DJT stock

2D7Y74W Rep. Devin Nunes, R-C.A., asks a witness a question during a House (select) Intelligence Committee Hearing on Mueller report implications on Capitol Hill in Washington, D.C. on June 12, 2019. Credit: Alex Edelman/The Photo Access

Photo: Alamy

Trump Media & Technology Group (TMTG) went public this year on the Nasdaq Stock Exchange under the ticker “DJT” following a long-awaited merger with Digital World Acquisition Corp.

The move has provided TMTG, the parent company of President Trump’s free speech platform Truth Social, with access to public capital and, therefore, a limitless pool of development opportunities for the organization.

However, TMTG CEO Devin Nunes has expressed some concern about stock manipulation. On May 15, he sent a new letter to follow up with House GOP Chairmen Jim Jordan (Ohio), Jason Smith (Mo.), James Comer (Ky.), and Patrick McHenry (N.C.). These congressmen chair the Committees on House Oversight, Ways and Means, Oversight and Reform, and Financial Services, respectively.

This is the third letter Nunes has sent to Congress asking them to take swift action. On May 1, Nunes fired off a letter to urge the chairmen to investigate the short-selling of DJT shares. The TMTG CEO named several firms that may be violating SEC rules.

In April, Nunes asked the GOP chairmen to investigate “anomalous trading” of DJT stock following a sudden spike in value, fearing alleged manipulation and requesting clarity on whether any laws had been broken, via CNBC.

The rapid rise and fall in stock price have apparently caused ongoing concern regarding alleged potential market manipulation and short sales, spurring Nunes to pen yet another letter to Congress on May 15 about the phenomenon.

He wrote:

“The apparent anomalies surrounding the trading of DJT have become chronic and alarming to TMTG.  In the last 30 trading days, an extraordinary volume of DJT shares traded have been shorts, leading to an astonishing quantity of FTDs.  In fact, recently published SEC data indicate that FTDs exceeded 1 million DJT shares on eleven separate trading days between April 9, 2024, and April 30, 2024, with a peak of over 2.3 million FTDs on April 29, 2024, alone.3  Data made available to us suggest that serious anomalies may have occurred on that date, as well as on April 30 and May 1.”

In this context, Nunes’ use of “FTDs” refers to “failure to deliver,” and he argued that TMTG’s stock position on the Nasdaq Reg SHO Threshold List “can indicate the illegal ‘naked’ short selling of a security.”

He has asked Congress to nudge the Financial Industry Regulatory Authority to issue “Electronic Blue Sheet” requests regarding the stated timeline between April 30 and May 1. He also included a list of firms that he believed EBS notes should be sent to, including Citadel Securities, Apex Clearing, Velocity Clearing, and Cobra Trading.

Beyond that request, Nunes further requested continued investigation on the following records:

  • “Consolidated Audit Trail (“CAT”) trading data including trading records, quotes, market maker records, and add/drop records, and CAT tables revealing masked fields such as broker aliases;
  • FINRA data including brokers’ short interest data and Trade Reporting Facility (“TRF”) data with brokers’ market participant identifiers (“MPIDs”);
  • Depository Trust and Clearing Corporation (“DTCC”) information including daily position reports, CNS accounting summaries, participant daily activity statements, universal trade capture data, consolidated trade summaries (M209 records), and correspondent clearing records;
  • Reports from DTCC member firms reflecting total shares short since February 14, 2024 (including trading under the ticker ‘DWAC’ prior to March 26, 2024), CAT data for loan/borrow reports, and daily locate and pre-borrow logs.”

Nunes closed his letter by stating his belief that a “robust inquiry is needed to protect shareholders, including TMTG’s retail shareholders, and to ensure that Main Street investors retain their faith in the fairness of U.S. markets.”

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