Citadel Securities blasts Trump Media CEO over DJT quick sale letter

Citadel Securities ripped Trump Media CEO Devin Nunes on Friday for a letter he despatched to the Nasdaq that talked about Citadel Securities and different main market corporations after warning of attainable unlawful short selling of Trump Media shares.

“Devin Nunes is the proverbial loser who tries in charge ‘bare quick promoting’ for his falling stock price,” mentioned a spokesperson for Citadel Securities, underscoring the sharp fall of Trump Media inventory because it started public buying and selling with the DJT ticker in late March.

Citadel Securities’ founder and non-executive chairman, Ken Griffin, is a significant donor to Republican candidates — amongst them Nunes, a former GOP congressman whose firm owns the Trump Social app.

“Nunes is strictly the kind of particular person Donald Trump would have fired on [The] Apprentice,” mentioned Citadel Securities spokesperson, referring to the previous Republican president’s enterprise competitors actuality TV present.

“If he [Nunes] labored for Citadel Securities, we’d hearth him, as potential and integrity are on the middle of all the things we do,” the spokesperson added.

A Trump Media spokeswoman fired again, saying: “Citadel Securities, a company behemoth that has been fined and censured for an extremely big selection of offenses together with points associated to bare quick promoting, and is world well-known for screwing over on a regular basis retail buyers on the behest of different companies, is the final firm on earth that ought to lecture anybody on ‘integrity.'”

In a submitting later Friday with the Securities and Trade Fee, Trump Media famous it issued that response on its Reality Social and to media retailers.

“Quite than help our frequent sense efforts to advertise transparency and compliance, Citadel Securities bizarrely focused our CEO with an unhinged assault,” the corporate mentioned in that submitting.

Nunes’ letter to Nasdaq CEO Adena Friedman was dated Thursday, the identical day that Trump Media notified the SEC it had issued shareholders detailed directions on the right way to keep away from their DJT shares being utilized by quick sellers who’re betting that the worth of the inventory will fall.

Whereas Trump Media’s share worth has risen strongly previously three days, it’s nonetheless buying and selling sharply decrease than its debut opening worth on March 26.

The corporate, which owns Reality Social and had simply $4.1 million in income final 12 months, has seen its market capitalization shed billions of {dollars} on account of the share worth drop.

Nunes advised Friedman in his letter, “I write to carry your consideration to potential market manipulation of the inventory of Trump Media & Expertise Group Corp.”

Nunes steered that Trump Media’s worth had been used for so-called bare quick promoting, a apply during which merchants promote shares of an organization that the vendor had not really borrowed for that function.

Nunes mentioned brokers had a “vital monetary incentive to lend non-existent shares” to quick sellers due to the unusually excessive premiums they’ve been in a position to cost for such loans of Trump Media shares.

“Information made obtainable to us point out that simply 4 market members have been chargeable for over 60% of the extraordinary quantity of DJT shares traded: Citadel Securities, VIRTU Americas, G1 Execution Providers, and Jane Road Capital,” Nunes wrote.

Citadel Securities has been the one a kind of 4 corporations to touch upon Nunes’ letter.

The sturdy language in its response is putting, significantly due to the political background of individuals concerned in Trump Media and Citadel Securities.

Nunes resigned his seat representing a California district within the Home of Representatives in late 2021 to turn out to be the top of Trump Media when it was privately held. The corporate grew to become publicly traded final month on account of a merger with a shell firm.

Donald Trump, who’s the presumptive Republican presidential nominee, is almost all shareholder in Trump Media, holding a stake of practically 60%.

Citadel Securities’ founder, Griffin, contributed $5 million to a political motion committee backing former South Carolina Gov. Nikki Haley in her unsuccessful marketing campaign in opposition to Trump for the GOP nomination.

In September 2021, Griffin donated $5,800 to Nunes’ congressional marketing campaign, three months earlier than Nunes mentioned he was resigning his seat to turn out to be Trump Media’s CEO, in response to a Federal Election Fee submitting.

Citadel Advisors, an funding administration agency additionally based by Griffin, as of December owned practically 160,000 shares valued at $2.8 million in Digital World Acquisition Corp., the shell firm whose merger with Trump Media final month enabled Trump Media to turn out to be publicly traded.

A Citadel spokesperson advised CNBC, when requested about that stake in DWAC, mentioned, “In line with our function as a market maker we frequently have some degree of stock for extremely traded shares.”

“The aim is to facilitate buying and selling for purchasers, to not take a directional wager a method or one other,” the spokesperson mentioned.

— Further reporting by CNBC’s Brian Schwartz.