Devin Nunes, chief executive officer of Truth Social, speaks during the Conservative Political Action Conference (CPAC) in National Harbor, Maryland, US, on Thursday, March 2, 2023.
Al Drago | Bloomberg | Getty Images
Citadel Securities ripped Trump Media CEO Devin Nunes on Friday for a letter he sent the Nasdaq Stock Market which mentioned Citadel Securities and other major market companies after warning of possible illegal short sale trading in DJT shares.
“Devin Nunes is the proverbial loser who tries to blame ‘naked short selling’ for his falling stock price,” a spokesperson for Citadel Securities said.
“Nunes is exactly the type of person Donald Trump would have fired on The Apprentice,” said the spokesperson referring to the former Republican president’s business competition reality TV show.
“If he [Nunes] worked for Citadel Securities, we would fire him, as ability and integrity are at the center of everything we do,” the spokesperson added.
Pavlo Gonchar | Lightrocket | Getty Images
A spokeswoman for Trump Media told CNBC in response: “Citadel Securities, a corporate behemoth that has been fined and censured for an incredibly wide range of offenses including issues related to naked short selling, and is world famous for screwing over everyday retail investors at the behest of other corporations, is the last company on earth that should lecture anyone on ‘integrity.’ “
Nunes’ letter to Nasdaq CEO Adena Friedman came as Trump Media has given shareholders detailed instructions on how to avoid their shares being used by short sellers who are betting that the price of DJT will fall.
While Trump Media’s share price has risen strongly in the past three days, it is still trading at about $26 per share lower than its debut opening price on March 26.
The company, which had just $4.1 million in revenue last year, has seen its market capitalization shed billions of dollars as a result of the share price drop.
Nunes told Friedman in his letter, “I write to bring your attention to potential market manipulation of the stock of Trump Media & Technology Group Corp.”
Nunes suggested that Trump Media’s price had been used for so-called naked 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 “significant financial incentive to lend non-existent shares” to short sellers because of the unusually high premiums they have been able to charge for such loans of DJT 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.
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Citadel Securities has been the only one of those four companies to comment on Nunes’ letter, and the strong language in its response is striking, particularly because of the political background of people involved in Trump Media and Citadel Securities.
Nunes is a former Republican congressman from California. He resigned from the House of Representatives in late 2021 to become the head of 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 stake of nearly 60%.
Citadel Securities’ founder and non-executive chairman is Ken Griffin, who has been a major donor to Republican candidates.
Griffin contributed $5 million to a political action committee backing former South Carolina 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 said he was resigning his seat to become Trump Media’s CEO, according to a Federal Election Commission filing.
– Additional reporting by CNBC’s Brian Schwartz