Key takeaways:
- Warren and Schiff asked SEC Chairman Paul Atkins to examine whether Truth API raises insider trading or market manipulation concerns.
- Trump Media has discussed charging as much as $100,000 a month for the data feed, which is scheduled to launch by Aug. 1.
- Trump Media said Senate Democrats are mischaracterizing the product and argued it involves publicly available information.
Sen. Elizabeth Warren and Sen. Adam Schiff are pressing the Securities and Exchange Commission to investigate Trump Media’s plan to sell high-speed access to Truth Social posts, including those from President Donald Trump, warning that the service could give Wall Street firms an unfair trading edge.
In a letter dated Tuesday to SEC Chairman Paul Atkins, the Democratic senators asked the agency to examine whether the forthcoming Truth API product raises concerns under laws governing insider trading and market manipulation. The product is scheduled to launch by Aug. 1 and would provide paying business customers with rapid access to influential Truth Social posts.
Trump Media and Technology Group, the parent of Truth Social, announced the business-to-business subscription model on July 16. The company said the licensed data feed would offer banks, trading firms and other customers “real-time” access to the platform’s most influential posts, with delivery “within milliseconds.” Al Jazeera, citing a letter reviewed by Reuters, reported that the feed would provide access to posts from the 10 most influential Truth Social accounts, including Trump’s.
Trump Media has discussed charging as much as $100,000 a month for the product, Reuters and other outlets have reported. The company has said it already has customers signed up ahead of the launch but has not identified them.
“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 wrote in the July 28 letter, according to Al Jazeera.
The senators said the service is built around the market-moving potential of Trump’s social media posts. Their letter cited examples in which stock prices shifted after Trump posted about companies on Truth Social: Citigroup outperformed other banks after he praised the bank, Palantir’s stock rose after Trump used the defense contractor’s ticker symbol, and Intel shares rose 3% hours after he wrote that “Intel Stock continues to rise.”
Warren, the ranking Democrat on the Senate Banking Committee, and Schiff, a member of the Senate Judiciary Committee, said Trump Media’s plan “threatens to undermine the integrity of capital markets.” They asked the SEC to provide an analysis of the product under insider trading and market manipulation laws, describe potential enforcement plans if manipulation occurs, and outline legal tools available to retail investors.
Trump owns about 41% of Trump Media through a trust overseen by his children, according to Al Jazeera. The senators’ letter said the company is 41% held by Trump’s revocable trust. They argued that Trump stands to benefit financially if the subscription product generates revenue.
“As adoption grows, we expect Truth API to become a meaningful, ongoing source of revenue for the company, creating lasting value for shareholders,” Trump Media interim CEO Kevin McGurn said in a mid-July release.
A spokesperson for the SEC and Atkins confirmed receiving the senators’ letter but declined further comment, Al Jazeera reported. The White House referred requests for comment to Trump Media.
“Senate Democrats continue to mischaracterize Truth API either out of ideological opposition to free markets or a failure to grasp the distinction between public and nonpublic information — or, quite possibly, both,” a Trump Media spokesperson said in an emailed statement. The spokesperson added: “The Senators must have invented a new theory of ‘insider trading’ based on publicly available information.”
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