What is Trump Media's Truth API and why is it controversial?
Political opponents of Trump have criticised the service. Democratic Senators Elizabeth Warren and Adam Schiff have written to the US securities regulator to ask if
Political opponents of Trump have criticised the service. Democratic Senators Elizabeth Warren and Adam Schiff have written to the US securities regulator to ask if it will investigate whether Truth API breaks the law. The Securities and Exchange Commission (SEC) has confirmed receipt of the letter, but has declined to comment on whether it will investigate. The potential for insider trading to occur has also been raised. The practice, which is illegal, involves people making market trades or bets based on information that is not available to the general public.
A spokesperson for TMTG said in response to the letter sent to the SEC that Senate Democrats "continue to mischaracterise 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". TMTG has also said "the Senators must have invented a new theory of 'insider trading' based on publicly available information". Whether or not information being provided by the service is public or non-public appears to be the key test. Richard Painter, former ethics lawyer to President George W Bush, told the BBC he believes it could be classed as insider trading to sell material and official US government information, prior to it being public knowledge, on the platform.
"If I were commissioner of the SEC, I would threaten to resign unless they put a stop to this plan or promise that no posts... that have to do with US government business [will be included]," he says. Saluzzi, though, points out that many other data providers, news organisations and stock exchanges currently operate similar services, providing a "precedent" for TMTG. However, he adds: "There's a different story when it comes to ethics." Trump, who owns about 41% of Trump Media through a trust his children oversee, does stand to profit from the service.
"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 said in their letter to SEC.
The BriefWire