This Word Means: Insider trading

In the mix now are allegations of the president engaging in insider trading, something unprecedented in US history. Hours before announcing a 90-day pause on tariffs, Trump said in a social media post: “THIS IS A GREAT TIME TO BUY!!!”, signing off with his initials “DJT”. While Trump is not known to make posts with these initials, DJT is also the stock symbol for his company, the Trump Media and Technology Group Corp.

After the pause on tariffs, the Trump Media and Technology Group stocks rose over 20 per cent.

HOW DOES THIS RELATE TO INSIDER TRADING?

Insider trading is when a breach of a fiduciary duty or other relationship of trust and confidence happens in trading a security (for example, a stock) based on nonpublic information that only a few people are privy to.

The US government’s market regulator, the Securities and Exchange Commission (SEC), notes some examples of insider trading:

(i) If employees of law, banking, and brokerage firms trade in securities based on information obtained while providing services to the corporation(s) whose securities they traded;

(ii) Government employees who traded based on confidential information they learned because of their employment with the government.

Notably, the Securities and Exchange Board of India (SEBI) also issued its Prohibition of Insider Trading (Amendment) Regulations, 2025, in March. In the same month, it gave an administrative warning to Nestlé India for violating regulations. According to SEBI, the violation involved a “contra trade,” or when an insider buys or sells shares within six months of a previous transaction in the same security, aiming for short-term profits.

COULD THE ALLEGATIONS AGAINST TRUMP STAND?

Democrats have alleged that Trump’s post essentially tipped his followers to invest at a time when markets were volatile. Senators Adam Schiff and Ruben Gallego have signed a letter accessed by Time Magazine, “to request an urgent inquiry into whether President Trump, his family, or other members of the administration engaged in insider trading or other illegal financial transactions”.

According to The Guardian, Republican representative and Trump ally Marjorie Taylor Greene recently disclosed that she had made several purchases on April 3 and 4 following the initial tariff announcements. Many stocks later recovered following the pause on tariffs.

Whether the charges against Trump stand remains to be seen. It would depend on factors such as the specific purchase of securities and whether Trump told certain people about his decision before they made those purchases. It also depends on the willingness of the SEC and Republican legislators to pursue the allegations, something which is highly unlikely in the current political climate where Trump stands as a dominant figure in US politics.