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Billionaire Ken Griffin’s Citadel Securities has called the former congressman who runs Donald Trump’s media business a “loser” after he singled out the powerful trading firm in a letter suggesting an illegal form of short selling was responsible for the fall in its share price.
Devin Nunes, chief executive of Trump Media & Technology Group, wrote to the head of Nasdaq’s stock exchange this week “to draw your attention to possible market manipulation” of the company’s stock, according to a filing released Friday.
Nunes, a former Republican congressman, named four equity market makers in his letter: Citadel Securities, Virtu, Jane Street and G1 Execution Services. Without accusing any of them of manipulation, Nunes asked Nasdaq what steps it could take to “promote transparency and compliance by ensuring that market makers comply” with U.S. securities rules.
The letter raised concerns about so-called naked short selling, in which fund managers bet on stocks to fall without borrowing them in advance. Naked short selling has been banned in the United States since 2005.
G1 declined to comment. Virtu and Jane Street did not immediately respond to requests for comment.
Citadel Securities, whose founder Griffin is a mega donor to Republican candidates including Nikki Haley, who ran and lost to Trump in the 2024 primary election, offered a scathing response.
“Devin Nunes is the proverbial loser trying to blame ‘naked short selling’ for his stock price drop,” the Miami-based market maker said. “Nunes is exactly the kind of person Donald Trump would have shot The apprentice. If he worked for Citadel Securities, we would fire him, because competence and integrity are at the center of everything we do.
TMTG responded: “Citadel Securities, a giant company that has been fined and censured for an incredibly wide range of infractions, including issues related to naked short selling, and is world famous for screwing up ordinary retail investors at the behest of other companies, is the last company in the world that should be lecturing anyone about “integrity”.
Trump Media went public through a merger with a blank check company late last month. While the shares initially surged – increasing the former president’s paper wealth by billions of dollars – they have since collapsed. As of Friday, the company was trading at $33.92 after climbing over the past two days, but the price remains well below its intraday high of $79.38.
Data from S3 Partners shows that TMTG is the third most expensive U.S. stock to borrow for short sales among companies with more than $25 million in short interest, behind cannabis group Canopy Growth and Canoo electric cars.
Because TMTG has become relatively expensive to sell or bet on, “brokers have a strong financial incentive to lend nonexistent stock,” Nunes said. Trump Media said it was on a Nasdaq list where shares were not delivered in time for trades to clear. One cause of these failures could be “naked” short selling.
“Nasdaq is committed to the principles of liquidity, transparency and integrity in all of our markets,” the exchange said. “We have long been an advocate for transparency in short selling and an active supporter of SEC rules and enforcement efforts intended to monitor and prohibit naked short selling.”
Nunes cited harm to small investors who flocked to Trump Media despite mounting losses. Short selling “often involves sophisticated market participants profiting at the expense of retail investors,” he writes.
TMTG updated its website this week to include advice for “long-term shareholders who believe in the future of the company” on how to prevent their shares from being loaned for an interest position at discovered.
A growing number of small companies have blamed falling stock prices on short selling, although the data does not suggest an overall increase in betting on falling stock prices.
At least 70 groups discussed the issue last year with their shareholders, more than three times the number who mentioned it in 2022, according to a Financial Times analysis of company filings and announcements via the transcription analysis company AlphaSense.
Several of them subsequently hired specialists to investigate the business records, while some took legal action. A September study by Phil Mackintosh, Nasdaq’s chief economist, found that short-selling activity had not increased significantly from previous years.
Trading volume for TMTG, which merged last month with Digital World Acquisition Corp, was double its 20-day average on Friday, according to Bloomberg data. Trump is by far the company’s largest shareholder.
With additional reporting from Alex Rogers in Washington