Key Takeaways:
Democratic senators are pressing the SEC to investigate whether Trump Media's plan to sell early access to President Donald Trump's social media posts violates securities laws.
Democratic Senators Elizabeth Warren and Adam Schiff asked the U.S. Securities and Exchange Commission on Tuesday to probe whether Truth Social parent Trump Media's plan to sell early access to President Donald Trump's social media posts for as much as $100,000 a month violates securities laws.
"This appears to be an outrageous abuse of the President's office for his personal benefit that undermines everyday investors and the integrity of our markets, while enriching Wall Street and other wealthy insiders," Warren and Schiff said in a July 28 letter to SEC Chairman Paul Atkins, a copy of which was reviewed by Reuters.
Trump Media, which owns Truth Social, plans to launch the Truth API product Aug. 1, offering trading firms the fastest access to posts from the platform's 10 most influential accounts, including Trump's. The company has discussed charging as much as $100,000 a month for the feed and said it has already signed up customers, though it did not identify them. Trump, who owns about 41% of Trump Media through a trust his children oversee, stands to profit directly from the arrangement.
The product raises novel legal questions about whether a sitting president's social media posts constitute government information that must be disseminated to the public free of charge, and whether monetizing early access to them violates insider trading laws. Trump has previously used Truth Social to endorse specific stocks including Citigroup, Intel and Palantir, which the senators said heightens the risk of market manipulation and undermines confidence that the market operates on a level playing field.
While technology platforms are generally permitted to offer clients early data access, even if it disadvantages some market participants, ethics experts have argued the Truth API product is different because Trump's posts carry unique market-moving power and he has an obligation to disseminate government information publicly. Trump's social media posts have in the past moved markets, and the profits of many top trading firms, hedge funds and financial services firms depend heavily on the speed at which they can trade off such news.
The SEC, led by Atkins — a free-market Republican appointed by Trump who has generally taken a softer stance on enforcement — confirmed receiving the letter but declined to comment further. Trump Media and the White House did not respond to requests for comment. The product is scheduled to launch Aug. 1, and an SEC probe could complicate Trump Media's efforts to monetize the president's social media presence, a key revenue driver for the company.
The letter is the latest example of Democratic lawmakers scrutinizing Trump's mixing of personal business with presidential affairs. Trump reported last month that he received more than $1.4 billion last year from his family's crypto projects, adding to concerns about conflicts of interest.
This article is for informational purposes only and does not constitute investment advice.
