TLDR:
- Trump Media & Technology Group (TMTG) asked the SEC to investigate UK-based Qube for alleged illegal short selling of DJT shares
- TMTG claims Qube disclosed a 6 million share short position in Germany worth $105 million without proper disclosure in other jurisdictions
- According to TMTG, Qube’s position has nearly doubled to 11 million shares
- TMTG closed last year with less than $4 million in revenue and $400 million in operating losses
- The company is expanding partnerships with crypto companies, including Crypto.com for a series of planned ETFs
Trump Media & Technology Group (TMTG), the parent company of Truth Social, has called on the Securities and Exchange Commission (SEC) to investigate what it describes as “suspicious” trading activity related to its stock. In a public letter to SEC Acting Chairman Mark Uyeda on Thursday, the company alleged that UK-based firm Qube may have engaged in “illegal short selling of DJT shares.”
TMTG claimed that Qube disclosed a short position of six million shares, worth approximately $105 million, in Germany on April 10. The company stated that this disclosure wasn’t properly reported to regulators in Qube’s own jurisdictions.
The letter further alleged that Qube’s position has since nearly doubled to 11 million shares, citing information from third-party sources. “We urge you to immediately investigate this suspicious trading and report your findings back to TMTG and any relevant civil and criminal authorities,” a TMTG representative wrote in the letter.
Stock Performance Troubles
The allegations come as Trump Media’s shares continue to fall. DJT stock closed at $22.04 on Thursday, marking a 35% decline from the beginning of this year.
TMTG has faced a series of legal and financial challenges in recent months. The company is currently under investigation regarding whether its social media platform Truth Social facilitated money laundering and had connections to Russian actors.
Financial disclosures reveal that TMTG closed last year with less than $4 million in revenue. The company reported operating losses of $400 million during the same period.
In its letter to the SEC, TMTG highlighted several factors that it believes could indicate illegal naked short selling of DJT shares. The company noted that DJT appeared on Nasdaq’s Regulation SHO Threshold Security List continuously for more than two months in 2024.
Crypto Connections Emerging
While dealing with stock concerns, TMTG has been expanding its presence in the cryptocurrency sector. The company has formed an exclusive partnership with Crypto.com for a series of not-yet-launched ETFs.
This move into crypto comes as other Trump-related ventures explore blockchain technology. World Liberty Financial, an Ethereum-based decentralized finance platform backed by President Trump and his family, recently received a $25 million investment in its WLFI tokens from market maker and investment firm DWF Labs.
World Liberty Financial aims to provide crypto borrowing and lending services on the Ethereum blockchain. The platform is part of the growing DeFi ecosystem that encompasses various financial applications utilizing cryptocurrencies.
Legal Challenges Not New for TMTG
The call for an SEC investigation is not the first time TMTG has pursued regulatory or legal action. In January, the company sued a Brazilian Supreme Court judge, claiming he violated U.S. free-speech protections when he sought to shut down accounts of a right-wing supporter of former Brazilian President Jair Bolsonaro.
In 2023, TMTG filed defamation lawsuits against 20 media organizations. These legal actions remain ongoing.
TMTG describes itself as a company with a mission “to end Big Tech’s assault on free speech by opening up the Internet and giving people their voices back.” Besides Truth Social, the company operates Truth+, a TV streaming platform focused on family-friendly content, and is launching Truth.Fi, described as “a financial services and FinTech brand incorporating America First investment vehicles.”
Qube did not immediately respond to requests for comment regarding TMTG’s allegations. The SEC has not yet issued any public statement about whether it will investigate the claims made by Trump Media.
DJT stock has been volatile since TMTG went public. Trading patterns have attracted attention from market watchers and now from the company itself, which considers the activity “suspicious” enough to warrant federal investigation.
TMTG’s memo to the SEC included claims that American equities exchanges “should be operated with full transparency and maximum efficiency, not as an opaque free-for-all reminiscent of a third-world casino.”
As the situation develops, investors and market observers will be watching closely to see if regulatory authorities take action based on TMTG’s allegations about DJT stock trading practices.
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