Trump Media & Technology, a media company controlled by President Donald Trump, said Thursday that it has asked the U.S. Securities and Exchange Commission (SEC) to investigate recent short positions in its stock.
Hedge fund Qube Research & Technologies disclosed on Monday that it held a short position of about $105 million in Trump Media, according to a filing in Germany’s federal gazette Bundesanzeiger.
Trump Media is the parent company of the Truth Social platform, in which Trump owns 53%. In a memo sent to the U.S. Securities and Exchange Commission (SEC) on Thursday, the company said it was concerned that Qube’s short position may involve “suspicious activity.”
Short selling is a controversial practice that often comes under scrutiny during periods of market turmoil. Executives often criticize the legal trading, while some activist investors point out that they have discovered corporate misconduct.
“We urge you to immediately investigate this suspicious transaction and report your findings to TMTG and any relevant civil and criminal authorities,” the memo read.
Trump Media also said there may be “indications of illegal naked short selling of Dow Jones Industrial Average shares,” which is prohibited in the United States.
A spokesman for the Securities and Exchange Commission declined to comment. Trump Media and Qube have not yet responded to requests for comment on the memo.
When asked about its short position in Trump Media earlier this week, Qube told Reuters that its position was driven by quantitative models and “does not reflect a particular view of company fundamentals.”
In response to questions about potential conflicts of interest, the White House noted that the president’s assets are managed by a trust managed by his children.
“There is no conflict of interest,” White House spokeswoman Anna Kelly said in an emailed statement.
Investors who short a company’s stock bet that the stock price will fall. In a short trade, investors borrow shares and then sell them, betting that the price will fall so that they can buy them back at a lower price to repay the loan and pocket the difference.
Naked short selling of stocks refers to the act of short selling stocks without first borrowing the stocks or confirming whether they can borrow the stocks.
This is not the first time that Trump’s media and technology companies have made similar complaints. In April last year, the company disclosed in a filing with the U.S. Securities and Exchange Commission that it had warned Nasdaq that its stocks had “potential market manipulation.”
