Securities experts warn Truth API may break federal law
Trump Media & Technology Group on Saturday launched Truth API, a premium data feed that gives institutional investors early access to President Trump’s Truth Social posts for a fee of up to $100,000 a month, according to the company and NPR. The service is designed to provide a speed advantage in high-frequency trading, where milliseconds can mean millions of dollars.
The offering immediately drew scrutiny from securities law experts. Renée Jones, a Boston College professor and former top official at the Securities and Exchange Commission, said the paid service appears to run afoul of insider trading laws.
“So if the president’s Truth Social posts are being monetized, and if some people get special access to them, that’s misappropriated information,” Jones told NPR. “And by giving people his posts early, he is also violating his duty of trust and confidence.”
Jones pointed to the Stock Act of 2012, which prohibits members of Congress and the executive branch from trading stocks based on privileged information. She said Trump’s lawyers could argue that because the posts are announced publicly, the service is not deceitful or fraudulent, but that the early-access element could still violate the law.
Sens. Elizabeth Warren of Massachusetts and Adam Schiff of California on Wednesday sent a letter to the SEC requesting an investigation, calling the service “an outrageous abuse of the President’s office for his personal benefit that undermines everyday investors and the integrity of our markets.” The SEC declined to comment.
Shannon Devine, a spokeswoman for Trump Media & Technology Group, defended the offering in a statement. “Truth API offers customers the fastest way to ingest publicly available Truth Social data. Critics must have invented a new theory of ‘insider trading’ based on publicly available information,” Devine said. She dismissed the senators’ letter as partisan wrangling, saying, “With no apparent sense of irony, certain politicians falsely accuse us of anti-free-market behavior while pressuring businesses into boycotting a product, all in a coordinated effort to harm a publicly traded company.”
Virginia Canter, a former SEC lawyer now with Democracy Defenders Fund, a nonprofit critical of the Trump administration, said the service disadvantages regular investors. “Channeling nonpublic information to Trump’s media company for high-speed dissemination to his wealthy institutional investors is a step toward normalizing insider trading that undermines the integrity of U.S. markets and further erodes investor confidence,” Canter said. She added that “regular investors who unfortunately may be on the losing sides of those trades because they do not have the same access to information” will bear the cost.
Trump is the largest shareholder of his media company through a trust controlled by his eldest son, Donald Trump Jr., regulatory filings show, meaning the Trump family’s wealth will increase as customers sign up for Truth API.
One Wall Street executive who requested anonymity for fear of retaliation from the Trump administration described the offering as “insane.” The executive said, “I can say for myself and 200 of my friends in finance, we’re not getting anywhere near this. In another administration, this would be considered criminal.” NPR reported that it reached out to 12 other major players in finance, and none would speak publicly, with some citing the risk of landing in Trump’s crosshairs.