Devin Nunes, CEO of Truth Social, speaks during the Conservative Political Action Conference (CPAC) in National Harbor, Maryland, USA on Thursday, March 2, 2023.
Al Drago | Bloomberg | Getty Images
Citadel Securities torn Trump media CEO Devin Nunes on Friday for a letter he sent to Nasdaq that cited Citadel Securities and other major market firms after warning of possible illegal short selling of Trump Media stock.
“Devin Nunes is the proverbial loser trying to blame ‘bare short selling’ for his stock price decline,” said a Citadel Securities spokesman, noting the sharp drop in Trump Media stock since it went public with DJT in late March. .
Citadel Securities founder and non-executive chairman Ken Griffin is a major donor to Republican candidates — including Nunes, a former GOP congressman whose firm owns the Trump Social app.
“Nunes is exactly the type of person Donald Trump would shoot [The] Apprentice,” said the Citadel Securities spokesman, referring to the former Republican president’s reality TV business competition.
“If he [Nunes] worked for Citadel Securities, we would fire him, as competence and integrity are at the heart of everything we do,” the spokesperson added.
A spokeswoman for Trump Media hit back, saying: “Citadel Securities, a corporate behemoth that has been fined and punished for an incredibly wide range of wrongdoing, including issues related to bare short selling, and is world-renowned for everyday retail investors at the behest of other companies, they are the last company on earth that should be lecturing anyone about “integrity”.
In a filing later Friday with the Securities and Exchange Commission, Trump Media noted that it issued that response to Truth Social and media outlets.
“Instead of supporting our common-sense efforts to promote transparency and compliance, Citadel Securities cynically targeted our CEO with an unprovoked attack,” the company said in that filing.
Pavlo Gonchar | Lightrocket | Getty Images
Nunes’ letter to Nasdaq CEO Adena Friedman was dated Thursday, the same day that Trump Media informed the SEC that it had issued detailed instructions to shareholders on how to avoid the use of their DJT shares by short sellers who they are betting that the stock price will fall. .
While Trump Media’s stock price has risen sharply over the past three days, it’s still trading well below its March 26 debut opening price.
The company, which owns Truth Social and had just $4.1 million in revenue last year, has seen its market capitalization drop by billions of dollars as a result of the falling share price.
Nunes told Friedman in his letter: “I am writing to bring to your attention the possible manipulation of the stock market by Trump Media & Technology Group Corp.”
Nunes suggested that Trump Media’s price had been used for so-called bare short selling, a practice in which traders sell shares of a company that the seller had not actually borrowed for that purpose.
Nunes said brokers had a “significant financial incentive to loan non-existent stock” to short sellers because of the unusually high premiums they were able to charge for such loans of Trump Media stock.
“The data made available to us shows that just four market participants were responsible for over 60% of the outstanding volume of DJT shares traded: Citadel Securities, VIRTU Americas, G1 Execution Services and Jane Street Capital,” wrote Nunes.
Citadel Securities was the only one of those four firms to comment on Nunes’ letter.
The strong language in her response is striking, especially given the political backgrounds of people involved in Trump Media and Citadel Securities.
Nunes resigned his seat representing a California district in the House of Representatives in late 2021 to head Trump Media when it was privately held. The company became publicly traded last month as a result of a merger with a shell company.
Donald Trump, who is the presumptive Republican presidential nominee, is the majority shareholder in Trump Media, holding a nearly 60 percent stake.
Citadel Securities founder Griffin has contributed $5 million to a political action committee supporting former South Carolina Gov. Nikki Haley in her unsuccessful campaign against Trump for the GOP nomination.
In September 2021, Griffin donated $5,800 to Nunes’ congressional campaign, three months before Nunes announced he was stepping down to become CEO of Trump Media, according to a Federal Election Commission filing.
Citadel Advisors, an investment management firm also founded by Griffin, in December owned nearly 160,000 shares worth $2.8 million in Digital World Acquisition Corp., the shell company whose merger with Trump Media last month allowed Trump Media to be publicly traded.
A Citadel spokesperson told CNBC, when asked about the DWAC stake, he said: “Consistent with our role as a dealer, we often have some level of inventory for highly traded stocks.”
“The intention is to make transactions easier for customers, not to make a directional bet one way or the other,” the spokesman said.
— Additional reporting from CNBC Brian Schwartz.