Democrats pen letter asking SEC to investigate Trump, allies for alleged market manipulation

Abby Hughes · CBC News

· Posted: Apr 11, 2025 3:17 PM EDT | Last Updated: 3 minutes ago

A radical of Democratic lawmakers is calling connected the Securities and Exchange Commission (SEC) to analyse "potential violations" of national securities laws by U.S. President Donald Trump oregon members of his interior circle.

In a missive released connected Friday, they asked the autarkic authorities bureau to analyse "whether President Trump, immoderate members of his cabinet, oregon different donor, insiders, and Administration officials engaged successful insider trading, marketplace manipulation, oregon different securities laws violations connected April 9, 2025."

Senators Elizabeth Warren, Chuck Schumer, Ruben Gallego, Mark Kelly, Adam Schiff and Ron Wyden signed the letter.

A days-long downward spiral connected banal markets ended on Wednesday, erstwhile Trump abruptly announced a 90-day intermission connected immoderate hefty planetary "reciprocal" tariffs archetypal announced past week.

Stocks soared connected the news, with the S&P 500 closing up 9.5 per cent by the extremity of trading that day, and the Nasdaq Composite closing up 12.2 per cent. The market, measured by the S&P 500, gained backmost astir $4 trillion, oregon 70 per cent, of the worth it had mislaid implicit the erstwhile 4 trading days pursuing Trump's tariff announcement.

Only hours earlier the intermission was announced, however, the president had told his followers connected his Truth Social tract to put successful the banal market.

"THIS IS A GREAT TIME TO BUY!!! DJT," Trump wrote astatine 9:37 a.m.

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Trump's societal media station raises questions

The timing of Trump's posts successful narration to the tariff intermission announcement is what's raising questions for the radical of Democrats, according to the letter.

"At this captious moment, the SEC indispensable bash its portion to reconstruct Americans' religion successful the regularisation of instrumentality and to sphere the integrity of the fiscal system," it reads successful part.

When asked to comment, White House spokesperson Kush Desai  wrote successful an email to CBC News: "It is the work of the President of the United States to reassure the markets and Americans astir their economical information successful the look of nonstop media fearfulness mongering. Democrats railed against China's cheating for decades, and present they're playing partisan games alternatively of celebrating President Trump's decisive enactment yesterday to yet country China."

David Chase, who erstwhile worked arsenic an enforcement lawyer with the SEC, said successful general, the banal market's utmost highs and lows implicit the past week don't mean anything amerciable is going connected down the scenes.

"Market volatility does not needfully mean ... that determination is manipulation," Chase, who present represents SEC whistleblowers, told CBC News. "It precise good whitethorn mean that the markets are moving efficiently and absorbing quality and reacting to it."

He added that "mere innuendo and speculation" based connected however volatile the markets are will apt not beryllium capable for the SEC to prosecute a case.

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Richard Painter, a firm instrumentality prof astatine the University of Minnesota and erstwhile White House main morals lawyer during the George W. Bush administration, agrees there's nary grounds astatine this constituent that anyone used backstage accusation to assistance them marque trades — which would magnitude to insider trading — or that anyone successful the Trump medication is intending to power banal prices.

But helium said it's inactive highly antithetic for a president to marque statements encouraging radical to instrumentality enactment connected the banal market — and that justifies an investigation.

"There's nary wide signs that determination was insider trading. But erstwhile the president of the United States himself ... tin determination markets to specified an bonzer degree, determination is that hazard and that potential," Painter said successful an interview.

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'Where there's smoke, there's not ever a fire'

Chase said accusations of insider trading and marketplace manipulation are often precise hard to prove.

Insider trading occurs when idiosyncratic gets backstage accusation astir a institution and uses that accusation to bargain and merchantability stocks for their ain idiosyncratic gain. Physical impervious of that often mightiness not exist, helium said.

"Most blase individuals cognize amended than to constitute an email saying, 'Hey, I conscionable got a large tip. Here it is. Trade connected it,'" Chase said. "Typically it's done verbally."

Without that, helium said, the SEC has to compile circumstantial grounds erstwhile prosecuting insider trading — like, for example, calendars lining up betwixt the idiosyncratic with the accusation and the idiosyncratic who made the trade.

Cases of marketplace manipulation are similar. Chase said the SEC has to beryllium the intent to interaction the worth of a banal — which is hard for galore of the aforesaid reasons. Without immoderate incriminating emails oregon texts, these cases are besides usually based connected suspicious circumstantial evidence, helium said.

"Where there's smoke, there's not ever a fire, but determination could be. I mean, that's truly the astir that we tin instrumentality distant by mode of ... a cheesy analogy," Chase said, noting that SEC investigations usually instrumentality years, and successful galore cases, the agency's investigations mightiness magnitude to nothing.

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