Shares in two little-known New York-listed companies spiked ahead of announcements that members of the Trump family had joined their advisory boards. These developments have raised suspicions of unusual trading activity, drawing scrutiny from regulatory experts.
Trading in Unusual Machines, a drone manufacturer that went public last year, nearly tripled in the four weeks leading up to its November 27 disclosure that Donald Trump Jr. had joined its advisory board. Similarly, shares in Dominari Holdings, a fintech and securities firm based in Trump Tower, soared by 580% in the six weeks before its February 11 announcement that both Donald Trump Jr. and his brother Eric Trump were joining the company’s advisory board.
Experts have pointed out that the timing and scale of the stock movements are unusual, especially since they didn’t coincide with earnings reports or other news. Bill Singer, a former regulatory attorney, noted that such dramatic changes suggest that the events may not have been completely isolated from one another.
Unusual Machines, valued at $90 million, saw its average daily trading volume rise to 290,000 shares in the four weeks before the announcement, up from 93,000 in the preceding months. Dominari, worth about $60 million, experienced an even greater surge, with its daily volume jumping from 11,700 to 1.2 million shares.
Before the public announcement, the Trump brothers were each granted 966,000 shares of Dominari, worth 6.7% of the company. In contrast, a filing from Unusual Machines revealed that Trump Jr. held 200,000 shares through a restricted stock agreement and 131,000 shares purchased separately.
Unusual Machines noted that only three senior officers, along with its board and counsel, were aware of Trump Jr.’s planned involvement before the announcement. It insisted there was no evidence that any individuals involved had violated any duties.
Despite the surge in trading, shares of both companies have since fallen below the levels seen immediately after the Trump family appointments but remain above where they were a year ago.
This trading activity comes at a time of increasing scrutiny over potential conflicts of interest involving the Trump family, particularly with the intersections of business and politics. Earlier, the announcement of a merger involving Trump Jr.’s media company raised similar concerns when stock trading spiked just before the deal was made public.
Regulatory experts, such as Adam Pritchard, a law professor at the University of Michigan, have described the stock movements as “clearly unusual,” though they did not necessarily indicate insider trading. He pointed out that as board advisers, the Trump brothers may not be subject to the same restrictions as full board directors regarding trading based on inside information.
The surge in trading volume before the Trump family’s appointments highlights growing concerns over transparency and potential conflicts of interest in the intersection of politics and business.
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