A recent social media post by former President Donald Trump, followed by a market-moving tariff announcement, has sparked speculation among his critics regarding potential insider trading.
On April 9, at 9:37 a.m. ET, Trump posted on Truth Social, suggesting, “THIS IS A GREAT TIME TO BUY!!! DJT.”
This post came shortly after key market indexes had experienced a nearly 20 percent downturn.
Later that same day, at 1:18 p.m., Trump announced a 90-day pause on certain tariffs he had previously unveiled just a week earlier.
Although Trump did not lift the nearly universal 10 percent tariffs or the specific tariffs on Canada, Mexico, and China, his decision to pause some tariffs caused a surge in the stock market for the rest of the day.
By the market close on April 9, the S&P 500 had climbed 9.5 percent, indicating investor relief over the tariff pause.
Interestingly, Trump’s own company, with the ticker symbol DJT, saw an increase roughly double that percentage, boosting his net worth by an estimated $415 million within the single day.
Social media users highlighted a video showing Trump within the Oval Office, celebrating the stock market’s gains.
In the video, Trump remarked, “He made $2.5 billion today and he made $900 million — that’s not bad,” while referring to two other men present in the room.
The caption accompanying the video in a post shared on X (formerly Twitter) suggested that this behavior might be indicative of market manipulation.
Reports indicate one of the men in the video was Charles Schwab, founder and chairman of the financial services firm that bears his name.
Democratic lawmakers quickly expressed their concerns over the timing of Trump’s actions.
Senator Chris Murphy of Connecticut shared on X, “An insider trading scandal is brewing.”
He continued, “Trump’s 9:30 a.m. tweet makes it clear he was eager for his people to make money off the private info only he knew.”
On April 10, Democratic Senators Ruben Gallego of Arizona and Adam Schiff of California sent a letter to the Office of Government Ethics.
They requested an urgent inquiry to determine whether the President, his family, or members of his administration had engaged in insider trading or other illegal financial transactions.
Senator Bernie Sanders of Vermont also weighed in, saying during a CNN town hall on April 9, “If you know two hours earlier that the stock market’s going to go (up), what are you going to do? You’re going to buy a hell of a lot of stock.”
PolitiFact has received multiple inquiries from readers seeking clarification on Trump’s actions and their potential implications.
However, legal and financial experts have downplayed the likelihood that Trump’s actions would lead to legal consequences.
Kevin R. Douglas, a law professor at Michigan State University, pointed out that insider trading laws often lack clarity and can be difficult to prove.
In a statement, White House spokesman Kush Desai argued, “It is the responsibility of the President of the United States to reassure the markets and Americans about their economic security in the face of nonstop media fear mongering.”
Desai further criticized Democrats, stating, “Democrats railed against China’s cheating for decades, and now they’re playing partisan games instead of celebrating President Trump’s decisive action yesterday to finally corner China.”
So, what exactly constitutes insider trading?
Insider trading occurs when individuals trade stocks based on non-public information obtained through a relationship of trust and confidence, according to Sarah J. Williams, a professor at Penn State Dickinson Law School.
Market manipulation is another related offense, typified by schemes such as “pump and dump,” where a stock promoter artificially inflates a stock’s price through false statements before selling their holdings at that inflated price.
Theoretically, insider trading statutes could include individuals in the executive branch, including the President, said Allan Horwich, an emeritus law professor at Northwestern University.
Moreover, securing a conviction in such cases is often challenging, regardless of the individual involved.
“These cases are often proven by circumstantial evidence,” Horwich noted, adding that criminal prosecutions have a high standard of proof, needing to be shown beyond a reasonable doubt.
Williams further explained that proving the illegal use of non-public information, as opposed to publicly available information, can be demanding.
Experts have outlined several reasons why Trump’s actions on April 9 might not lead to legal repercussions.
For one, Trump’s public post means the information was not kept secret from the broader public or his followers.
Since Trump’s recommendation to buy stocks was made publicly, it complicates any argument for insider trading, as Horwich asserted.
He stated, “Generally, if information is made public promptly, there is no room for insider trading issues, which by definition involve misuse of non-public information.”
This public nature of the information means that it would be challenging to contend that Trump was acting illegally by making a recommendation to buy stocks without revealing confidential information.
Typically, insider trading allegations fall under the jurisdiction of the Securities and Exchange Commission and the Justice Department.
Both of these agencies are part of the executive branch, which was tightly controlled during Trump’s presidency, thereby making prosecution of a sitting president highly improbable.
Another potential avenue for legal trouble could arise from private individuals filing lawsuits.
However, Williams indicated that an individual looking to sue over insider trading would need to prove that Trump had given advanced notice privately, a claim that would be difficult to substantiate.
Moreover, presidents often enjoy a great deal of leeway in these situations.
Nejat Seyhun, a finance professor at the University of Michigan, stated it would be a “high” bar to prove any illegality on Trump’s part in this case.
“Trump can easily say that the market has fallen 20 percent, and I want to make sure that panic does not become self-fulfilling,” Seyhun explained.
Additionally, as a public figure, Trump could assert that his comments were made as an official presidential act, which a Supreme Court ruling last year determined would qualify him for protection from prosecution.
In conclusion, any president facing similar circumstances would likely benefit from unique protections due to their position.
As Seyhun remarked, “Presidents make statements that move the market all the time.”
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