Trump Media & Technology Group (DJT) sent a letter to Nasdaq's CEO on Thursday warning of "potential market manipulation" of the company's stock via the "naked" short selling of shares.
The letter follows Trump Media, providing detailed instructions to shareholders on how to stop someone from loaning out their DJT shares to short sellers, who then execute trades betting that the price of the stock will fall.
In a filing, it was revealed that Trump Media CEO Devin Nunes wrote to Nasdaq CEO Adena Friedman, stating that "DJT appears on Nasdaq's 'Reg SHO threshold list,' which is indicative of unlawful trading activity."
Nunes added: "This is particularly troubling given that 'naked' short selling often entails sophisticated market participants profiting at the expense of retail investors."
While not accusing anyone of the practice, Nunes stated reports indicate that, as of April 3, 2024, DJT was "by far" "the most expensive U.S. stock to short." He argues that brokers have a significant financial incentive to lend non-existent shares.
"Data made available to us indicate that just four market participants have been responsible for over 60% of the extraordinary volume of DJT shares traded: Citadel Securities, VIRTU Americas, G1 Execution Services, and Jane Street Capital," Nunes wrote.
"In light of the foregoing, and Nasdaq's obligation and commitment to protect the interests of retail investors, please advise what steps you can take to foster transparency and compliance by ensuring market makers are adhering to Reg SHO, requiring brokers to disclose their "Net Short' positions, and preventing the lending of shares that do not exist."
"TMTG looks forward to assisting your efforts."