Insider trading has long been a furtive contest between traders, desperately hiding their material non-public information, and prosecutors in hot pursuit. In general, discovery implied conviction. But now it may have come out into the open, as high frequency traders can trade on material nonpublic information provided to them for a high fee by—of all people—the President of the United States, who is under a constitutional duty to “take care” that the laws are “faithfully” enforced. In this Statement, we will first describe President Trump’s system for a two-track disclosure of presidential announcements that will likely move the market, next assess it under a variety of legal theories (including the STOCK Act), then consider the largest obstacle to needed reform: namely, the Supreme Court’s decision in Trump v. United States.[1] Finally, we discuss briefly the possible liability of third parties, including those who may have aided and abetted this conduct and those who traded on the information from Truth Social ahead of other investors.

Unquestionably, Trump and other decisions pose a significant barrier to the imposition of either criminal or civil liability on the President and will likely lead Republican U.S. attorneys or SEC commissioners to decline to prosecute or sue the President. Still, the applicable statute of limitations on federal governmental enforcement will carry into the term of the next President (who might actually “take care” that the laws are faithfully enforced). As we will see later, the key issue for current state or future federal enforcement becomes whether market-moving statements made by President Trump were “official” or “unofficial” acts—and whether the delay in their publication to the general market can be legally attributed to him.

The New Trump Disclosure System

Following his election, President Trump organized Trump Media & Technology Group (“TMTG”) in 2021, which then created Trump API, a machine-readable data feed that enabled high frequency traders to have their computers read Trump’s postings on Trump Social and trade in a fraction of a second. Since then, Truth Social has been his primary means of making public announcements and communicating with the public. Although President Trump owns slightly over 41% of TMTG, this stock is held in a revocable trust, of which his son, Donald Trump, Jr., is the sole trustee and President Trump is the sole beneficiary.[2] Thus, President Trump is neither an officer, director, employee, nor voting shareholder of TMTG. At a minimum, this complicates the ability of a prosecutor or plaintiff to assert that President Trump “controls” TMTG (although it can still be asserted both that he controls his son or holds control because he can apparently revoke the trust). TMTG sells access to his posts on Truth Social for a fee of as much as $100,000 a month (or $1.2 million per year).[3] President Trump’s posts on Truth Social often drive the market (one post in August 2026 announcing that air strikes on Iran were cancelled drove oil prices down by nearly 5%[4], and another threatening to impose tariffs on China was followed by a 2.7% decline that day in the S&P 500).[5]

On August 10, 2026, TMTG’s interim chief executive announced that at least 10 customers, mainly high frequency traders, had subscribed to the Truth Social service on Trump API and also indicated that this CEO planned to offer this service in the future to retail investors as well. Democratic politicians, most notably, senators Elizabeth Warren and Adam Schiff, have sharply criticized this practice and called for an SEC investigation.[6] Litigation has been filed by public interest groups in the Southern District of New York, claiming this scheme is “profoundly corrupt” and violates the First and Fifth Amendments to the U.S. Constitution.[7] Academics have also criticized these practices as plain violations of insider trading laws (although to our knowledge, few law professors with experience in securities regulation have expressed it this simply[8]).

The Relevant Insider Trading Case Law

Because President Trump (presumably) neither traded securities nor was an insider or fiduciary at any corporation whose securities were affected by any communication on Truth Social, it is simplest to begin with the STOCK Act.[9] The STOCK Act expressly applies to the President, as it defines the term “executive branch employee” to include the President.[10] Further, the Stock Act expressly provides that every “executive branch employee” owes “a duty arising from a relationship of trust and confidence to the United States Government and citizens of the United States with respect to material, nonpublic information derived from such person’s position as an executive branch employee[11].” Still, this duty applies “solely for purposes of the insider trading provisions arising under this chapter, including … Rule 10b-5.”[12] In contrast, other federal statutes criminalizing conflict of interests expressly exclude the President,[13] thus underlining that the Stock Act focused on the President and deliberately made him a fiduciary for purposes of securities fraud.

To understand this in context, it needs to be recognized that earlier Supreme Court decisions have seemingly held that insider trading liability applies only to fiduciaries and their tippees.[14] Thus, the Stock Act’s express creation of a fiduciary duty with regard to material information, coupled with its inclusion of the President within the persons covered by the act, show a clear intent to prohibit insider trading and related acts of securities fraud by the President.

This specificity is in sharp contrast with other provisions of federal criminal law that apply to federal government employees, but specifically exclude the President, such as the federal conflict of interest statute.[15] Also, SEC rules that forbid corporate executives and others from engaging in “selective disclosure” or providing timing advantages to favored investors (such as Regulation FD) clearly do not apply to President Trump or other persons who are making material disclosures about matters not involving a specific issuer.[16] President Trump is obviously not disclosing material information about TMTG, but about military actions, tariffs, national job data, and related matters of foreign affairs or national economic policy. Although it can be plausibly argued, even in the absence of the Stock Act, that the Constitution contains language suggesting that the President should be deemed a fiduciary to the American people, the Stock Act provides the simplest, most direct path to this conclusion, and is intended to impose potential liability on governmental officials for insider trading. As next discussed, however, there is a major constitutional limitation on this theory.

Constitutional Limitations on Presidential Liability

In a 6-3 decision, the Supreme Court decided in 2024 in Trump v. United States that a president (including a former president) “may not be prosecuted for exercising his core constitutional powers, and he is entitled to a presumptive immunity from prosecution for all his official acts.”[17] Still, it added that the “President enjoys no immunity for his unofficial acts, and not everything the President does is official.”[18] Earlier decisions have specified a similar standard for civil liability: namely, the President is not civilly liable for official actions[19] but there is “no immunity” for unofficial acts.[20]

Two other statements in Trump further complicate attempts to hold a President liable: First, the court emphasized that:

In dividing official from unofficial conduct, courts may not inquire into the President’s motives.[21]

Second, the Court held that “the intended effect of immunity would be defeated” if the court could scrutinize the President’s official conduct, “even on charges that purport to be based only on unofficial conduct.”[22] Hence, it said:

Use of evidence about such conduct, even if an indictment alleges only unofficial conduct, would thereby heighten the prospect that the President’s decision making will be distorted.[23]

Thus, the Court ruled that courts may not admit a President’s official acts into evidence.[24]

These may seem somewhat cryptic statements, but they could have significant implications on any possible prosecution of Donald Trump. For example, Trump’s critics will argue that his posting of messages on Truth Social was primarily motivated by a desire to encourage high frequency trading firms to subscribe at the $100,000 a month fee. Plausible as this may be, does the Court’s above statement forbidding any inquiry into “presidential motives” preclude any attempt by prosecutors to discuss this profit-seeking motive?

Next, suppose the President posts on Truth Social that Iran’s Kharg Island (a key Iranian asset) will be bombed into oblivion, unless Iran agrees to specific terms within 24 hours. This threat seems to announce a fundamental decision that he is ordering in his “core” role as commander-in-chief, and the post is principally intended to pressure Iran into a settlement. Arguably, that sounds like “official conduct.” Still, the post may not even be admissible in evidence because of the Trump Court’s insistence that official acts not be admissible at trial (even if the case asserts liability only for unofficial conduct). Such a trial will be hard to plan or conduct.

Some may see an obvious difference between “official” and “unofficial” conduct. They will assert that President Trump’s running a business is “unofficial” conduct which is entitled to no immunity. The problem here is that there is little evidence available showing that President Trump is running the business. He is not an officer, director or employee of TMTG and does not even vote the shares held in trust for him. One can suspect that he does more (and such evidence may later become public), but such evidence is currently lacking.

Another line that could be drawn between “official” conduct and “unofficial” might be to assert that Trump’s posts on Truth Social are inherently “unofficial.” To be sure, they may sometimes be gossipy, angry, invective–filled, and blatantly inaccurate. But a key job of the President is to be a communicator, and at that Donald Trump has had success. If the President speaks to the nation from the Oval Office on national TV to explain his foreign policy, that seems official conduct. To draw a line between a televised speech and communications on social media and deem the latter as “unofficial” may show an out-of-date prejudice against new media. Presidencies are won and lost on how well the candidates can communicate, and it may be unwise and unfair to treat new forms of social media as inherently informal and unofficial.

To raise these issues about social media is not to resolve them. Indeed, in its Trump decision, the Court noted that a President’s “comments to the general public … present more difficult questions.”[25] Having said that, the Court also stated on that same page that:

And some Presidential conduct—for example, speaking to and on behalf of the American people…—certainly can qualify as official even when not obviously connected to a particular constitutional or statutory provision. For these reasons, the immunity we have recognized extends to the “outer perimeter” of the President’s official responsibilities, covering actions so long as they are not manifestly or palpably beyond [his] authority.[26]

On this basis, the odds are that presumptive immunity will apply.

What then is the best argument for finding the particular practices engaged in by TMTG as over the line and not covered by presumptive immunity? Here, we need to shift the focus from “official” versus “unofficial” conduct and focus on what is at the core of what the Truth Social postings are attempting to do. Essentially, the gambit here is to exploit high frequency traders’ desires to utilize latency arbitrage. If high frequency traders can arrange to obtain material information a split second before other traders, they can make immense profits that more than justify paying $100,000 a month for this earlier access. This same motivation explains practices, such as “colocation” (under which high frequency traders today pay stock exchanges very high fees so that they can place their computers closer to the exchange’s server and thereby obtain quicker execution of their order) and private feeds (which report price and quotation information more quickly than does the media). In all these cases, the high frequency trader is paying to jump the queue and get to the head of the line.

Standing alone, this is not inherently fraudulent, as the exchanges use such practices like colocation to gain increased liquidity and basically to turn the high frequency trader into a replacement for the old-fashioned specialist (who has today disappeared from the securities markets). In the case of TMTG, however, the incentives are very different. Not only is the high frequency trader hoping to learn very material information about military action, oil prices, tariffs, trade negotiations, or whatever from the very person making the critical decision, but the incentives of the party making the statement may be to make the statement it releases dramatic and market-moving. Here, we need to recognize that TMTG lost over $238 million between April and June 2025.[27] Further, its stock price had fallen over 80% since it went public, and it had just fired its original CEO in April 2026. Clearly, TMTG needed a strategy to turn itself around, and attempting to exploit liquidity arbitrage was precisely such a strategy. By creating a small timing difference between when information reached high frequency traders and when it reached the market generally, it could sell subscriptions to high frequency traders for an extraordinary price (at least once TMTG could demonstrate that it would regularly provide market-moving information). By now, it has.

Worse yet, those writing the posts that would appear on Truth Social (and particularly President Trump) know that the more dramatic the statement, the greater the likely market response. That is, a statement that “We are going to bomb Iran back into the Stone Age” would cause oil prices to rise more than a more cautious statement that “We have ended negotiations and may soon resume military action.” The danger here is not just that the statements made may misinform the market, but that the U.S. foreign policy may be affected by President Trump’s need to make TMTG profitable. Even if he does not “control” TMTG, he is its largest economic owner, with beneficial ownership of just over 41% of its stock. This is a unique danger that does not arise in the case of existing practices like colocation or private feeds, where traders are paying more for earlier information, but where there is little danger in those cases that the information will be deliberately sensationalized or, worse, distorted.

But even if the analysis is correct, it does not answer the Trump Court’s insistence that we must distinguish “official” from “unofficial” conduct. Here, some new facts need to be added to our evaluation: At the time that TMTG’s stock was offered to investors and it became a public company, Donald Trump entered into a contractual agreement, promising his investors that he would neither front run nor soon repeat his reports on Truth Social through similar reports on other social media services. Specifically, he agreed in a Second Amended and Restated License, Likeness, Exclusivity and Restrictive Agreement, dated as of February 2, 2024, that he would not repost or comment similarly to any post he made on Truth Social until six hours after the post ran on Truth Social.[28] This exclusivity agreement (made while President Trump was out of office) was clearly unofficial conduct (i.e., a private agreement with a corporation (TMTG) at the point at which TMTG was marketing itself to investors). In effect, Donald Trump was promising investors that he would serve the interests of TMTG and maintain a respectable distance between reports on Truth Social and any later and similar reports by him on other social media. Such “unofficial” conduct effectively guaranteed these investors that there would be a sufficient time distance between the reports that reach subscribers through TMTG and other reports that might otherwise reach the market; thus, high frequency investors knew they would receive the material information in their reports well before the market learned. This justified the extraordinary $100,000 monthly fee.

Let us be clear here: We do not assert that President Trump falsified (knowingly or recklessly) any statement made by him on Truth Social or TMTG. Nor do we claim to know what his mindset was; that is beyond our knowledge, and we draw no inference. All that we do say is that TMTG and Truth Social (with his active participation) deliberately created a timing differential between when information reached high frequency traders who subscribed to his service and when it later reached the market. This served his personal interests (and not public interests) and so should be considered “unofficial conduct.” If so, subject to all the previously described problems of proof and evidence, President Trump should not be immune from criminal or civil liability for conduct that truly threatens American interests. Indeed, the perverse effects of allowing any senior government official to profit depending on how that person phrases his or her public statements may be more dangerous than the insider trading, as it creates a serious conflict of interest between best serving one’s country and earning the highest profit.

In fairness, we recognize that this case is novel. This may argue that, as a matter of prosecutorial discretion, a criminal prosecution should not be brought, and only civil liability should be imposed. Here, we take no position, because we do not consider ourselves experts on prosecutorial discretion.[29] We do believe, however, that at least civil liability is appropriate on these facts, as this appears to be a clear attempt to tip information in a fashion that allows those willing to pay high fees to beat the market.

We will not analyze at any length the potential liability of third parties involved in President Trump’s actions, but they also face serious issues. These include TMTG, itself, its officers and directors, and the trustee under the trust. Both aiding and abetting securities fraud and conspiracy to commit securities fraud are well-recognized crimes. Even if the President is immune for actions taken in an official capacity, it does not follow that third parties aiding or conspiring with him are also immune (we do recognize that this is an unresolved legal issue which has not yet been addressed in the brief period since the Supreme Court ruled in the Trump case). Also legally exposed are those who paid high fees to obtain early access to material market-moving information on Truth Social. Arguably, they realized that information they traded on was material and still non-public. Lastly, the state law of a number of states (certainly including New York State, which has the Martin Act) also prohibits insider trading, and a state conviction would not be subject to a Presidential pardon. President Trump well understands that, as he has not succeeded in overturing his New York State conviction. Institutions considering whether to subscribe to Trump Social through TMTG should investigate carefully their own position as arguable tippees under both federal and state laws.

Beyond enforcement, new and clearer rules may also be needed. The insistence of TMTG that the information on Truth Social posts became public the instant that President Trump’s posts hit Truth Social is inconsistent with the SEC’s longstanding approach. New SEC rules are needed to clearly reject this argument and require some delay before trading based on such new information begins.[30] We do not need to consider all cases in which investors pay higher fees to obtain earlier access to nonpublic information to say that this case went way too far. A line must be drawn, and, in its absence, the rule of law is being flouted.

ENDNOTES

[1] 603 U.S. 593 (2024).

[2] For detailed descriptions, see Sasha Rogelberg, “ Nearly a Dozen Firms Are Already Paying up to $100,000 Per Month For Early Access to Trump’s Truth Social Posts,” FORTUNE (August 12, 2026), https:// https://fortune.com/2026/08/12/trump-media-truth-api-insider-trading/; Dan Primack & Zachary Basu, “Wall Street Finds New Edge Behind Trump’s Presidential Paywall”, AXIOS (August 4, 2026), https://www.axios.com/2026/08/04/trump-truth-social-feed-trades.

[3] See Rogelberg, supra note 2. Because this trust is revocable, it can be argued that President Trump has the ability to regain control at any time, and thus still holds control indirectly.

[4] See Primack and Basu, supra note 2.

[5] Id.

[6] Letter from Elizabeth Warren, Ranking Member, S. Comm. On Banking, House & Urban Affairs and Adam B. Schiff, U.S. Sen. to Paul Atkins, Chairman U.S. Sec & Exch. Commin (July 28, 2026). A similar letter was sent by Jamie Raskin, Ranking Member, H. Comm. On the Judiciary to Kevin McGurn, Interim Chief Exec. Officer, Trump Media & Tech Group Corp (July 30, 2026).

[7] See Complaint, Intercept Media, Inc. v. Trump, No. 1:26 – cv – 06867 (S.D.N.Y., filed August 12, 2026) at p.2.

[8] For a variety of academic views, all finding Trump’s actions to violate the First and Fifth Amendments of the Constitution, see “MFIA Clinic Represents Plaintiffs in Lawsuit Against Truth API”, August 12, 2026, https://law.yale.edu/yls-today/news/mfia-clinic-represents-plaintiffs-lawsuit-against-truth-api.

[9] See 15 U.S.C. § 78u-1(h) (2024).

[10] See 15 U.S.C. § 78u–1(h) (2)(A)(ii).

[11] 15 U.S.C § 78u – 1(h).

[12] Id.

[13] For example, 18 U.S.C. § 208(a), which criminalizes certain conflicts of interest to which an executive branch officer is subject, does not cover the President. This is because the definition of “executive branch employee or officer” for purposes of Section 208(a) is contained in Section 202(c), which excludes the President and Vice President.

[14] See United States v. O’Hagan, 561 U.S. 642 (1997). Although O’Hagan recognized the “Misappropriation Theory” of insider trading, and arguably the President may have “misappropriated” information from the United States when he advises the highest paying clients of TMTG that he is about to resume bombing of Iran. The O’Hagan decision is not dispositive of Trump’s possible liability. O’Hagan repeatedly stresses the need for deception of the misappropriator’s principal. But TMTG has disclosed that it will be publicizing Trump’s statements on Truth Social—and on a two-track basis with earlier disclosure to its high-paying clients. Whether the U.S. government is injured by this earlier disclosure (by a fraction of a second) to the high-paying clients is a very fact-specific question. Indeed, the more likely victim is the market and possibly those who paid higher prices because of the timing advantage conferred on earlier purchases.

[15] As noted supra at note 13, the President and Vice President are not subject to Section 208.

[16] See Regulation FD, 17 CFR § 241. 300. Also, Rule 102 of Reg FD makes clear that a violation of Rule 100 shall not be deemed to be a violation of Rule 10b-5

[17] Trump v. United States, 603 U.S. 593, at 642 (2024).

[18] Id.

[19] See Nixon v. Fitzgerald, 457 U.S. 731, 756 (1982).

[20] See Clinton v. Jones, 520 U.S. 681, at 684 (1997).

[21] 603 U.S. at 618 (“In dividing official from unofficial conduct, courts may not inquire into the President’s motives.”).

[22] Id at 631.

[23] Id.

[24] Id. This same rule appears to apply to civil actions as well. See Clinton v. Jones, 520 U.S. at 694, n.19.

[25] 603 U.S. at 617.

[26] Id. (quoting Blassingame v. Trump, 87 F.4th 1, 13 (D.C. Cir. 2023))

[27] See Sasha Rogelberg, supra note 2.

[28] We have reviewed a copy of this agreement, and it is also discussed in Intercept Media, Inc, v. Trump, supra note 7, at pp12-13. Our point is that Donald Trump appears to have been individually and knowingly involved in creating a two-track system that gave high paying customers advance access to material information before it reached the stock market.

[29] We further acknowledge that the indictment of a former President would be highly controversial and might divide the country.

[30] In Regulation FD, the SEC defines two different ways in which an issuer can make “public disclosure” of information that has been improperly selectively disclosed so that trading is not in violation of Regulation FD: First, the issuer can file a Form 8-K with the SEC (see Rule 101(e)(1), 17 CFR. 243.101(e)(1)). Second, an issuer can also satisfy Regulation FD “if it instead disseminates the information through another method (or combination of methods) of disclosure that is reasonably designed to provide broad, non-exclusive distribution of the information to the public.” (emphasis added). This is precisely what TMTG does not do. It provides neither “broad” nor “non-exclusive” distribution of the information. The two contexts (Regulation FD and posting on Truth Social) both involve selective disclosure and should be governed by a common standard.

This post comes to us from the Shadow SEC, whose members are professors John Coates at Harvard Law School, John C. Coffee, Jr. at Columbia Law School, James D. Cox at Duke University School of Law, Merritt B. Fox at Columbia Law School, and Joel Seligman at Washington University School of Law.