# Legal Ramifications of Trump's Twitter & Stock Trading **URL:** \ **Category:** In My Humble Opinion\ **Created:** [January 14, 2017, 4:12pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114 "2017-01-14T16:12:11Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![wevets](https://avatars.discourse-cdn.com/v4/letter/w/e9a140/32.png) [@wevets](https://boards.straightdope.com/u/wevets)\ **Post date:** [January 14, 2017, 4:12pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/1 "2017-01-14T16:12:11Z")
In December, a tweet by Trump sent Lockheed shares down by almost 2%… [http://www.marketwatch.com/story/trump-tweet-sends-lockheed-shares-down-boeing-shares-rising-2016-12-22](http://www.marketwatch.com/story/trump-tweet-sends-lockheed-shares-down-boeing-shares-rising-2016-12-22) > [@marketwatch.com](#): > > Shares of Lockheed Martin Corp. LMT, +0.76% declined in the extended session Thursday while shares of Boeing Co. BA, +0.34% advanced following a tweet by President-elect Donald Trump about cost overruns for Lockheed’s F-35 fighter. A similar tweet sent Boeing’s stock down about $1.25 on average for almost a day earlier in December. [https://www.washingtonpost.com/news/the-fix/wp/2016/12/06/did-donald-trump-tank-boeings-stock-because-he-was-mad-about-a-news-article/?utm\_term=.3a596054509d](https://www.washingtonpost.com/news/the-fix/wp/2016/12/06/did-donald-trump-tank-boeings-stock-because-he-was-mad-about-a-news-article/?utm_term=.3a596054509d) > [@Washington Post](#): > > We also know that Trump’s tweet tanked Boeing’s stock price, albeit only briefly. In 2013, Trump tweeted about having just bought stock in Boeing (“great company!”), but his spokesman said on Tuesday that the president-elect no longer holds stock in Boeing, or anything else, having sold it all in June. In January, a Trump tweet about Toyota sent that stock down temporarily by about 0.7%. > **[Donald Trump goes after Toyota over Mexico manufacturing in latest battle...](https://www.cnbc.com/2017/01/05/donald-trump-goes-after-toyota-third-automaker-in-a-week-over-mexico-manufacturing.html)** > > On Twitter, Trump threatens Toyota with a large border tax if it builds a new plant outside the U.S. > [@CNBC](#): > > Following the tweet, the company’s U.S.-listed shares ticked about 0.7 percent lower, hitting a session low of $120.32. It occurs to me that this kind of market manipulation would be a gold mine for anyone who knows in advance about Trump’s tweets. But I don’t know much about the legal matters involved. If someone on Trump’s staff knew about the tweeting and acted on it by buying or selling a stock, would that be considered insider trading and run afoul of the law? If Trump and a friend or family member collaborated on tweeting to send a company’s stock price down, would that be illegal? Would shareholders in a company’s stock damaged by a tweet have any legal recourse (possibly a civil lawsuit) assuming the tweet was factually false? (I seem to remember something about truth as a sufficient defense against libel/defamation) ---
**Author:** ![Me\_Billy](https://avatars.discourse-cdn.com/v4/letter/m/e480ec/32.png) [@Me\_Billy](https://boards.straightdope.com/u/Me_Billy)\ **Post date:** [January 14, 2017, 6:26pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/2 "2017-01-14T18:26:13Z")
Interesting. There are laws about “insider trading”, but I don’t think Trump or anyone getting prior information from him would be considered an “insider”? Also people like Trump don’t follow laws and are not ethical. Note the first thing the Republicans wanted to do was trash the Ethics Office! So don’t expect enforcement of such laws in the next 4 years. ---
**Author:** ![boffking](https://avatars.discourse-cdn.com/v4/letter/b/858c86/32.png) [@boffking](https://boards.straightdope.com/u/boffking)\ **Post date:** [January 14, 2017, 6:31pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/3 "2017-01-14T18:31:28Z")
As an aside, this does not apply to the current L.L.Bean controversy, as they are privately held. ---
**Author:** ![Tom\_Tildrum](https://avatars.discourse-cdn.com/v4/letter/t/e95f7d/32.png) [@Tom\_Tildrum](https://boards.straightdope.com/u/Tom_Tildrum)\ **Post date:** [January 14, 2017, 7:18pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/4 "2017-01-14T19:18:31Z")
No, it’s not illegal for public figures to criticize corporations. ---
**Author:** ![Happy\_Lendervedder](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/happy_lendervedder/32/8488_2.png) [@Happy\_Lendervedder](https://boards.straightdope.com/u/Happy_Lendervedder)\ **Post date:** [January 14, 2017, 7:36pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/5 "2017-01-14T19:36:42Z")
> [@Tom\_Tildrum](#): > > No, it’s not illegal for public figures to criticize corporations. What about promoting one? He tweeted that everyone should go out and buy from LL Bean because of the board member’s campaign donation. That doesn’t seem kosher. ---
**Author:** ![Evan\_Drake](https://avatars.discourse-cdn.com/v4/letter/e/b487fb/32.png) [@Evan\_Drake](https://boards.straightdope.com/u/Evan_Drake)\ **Post date:** [January 14, 2017, 7:36pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/6 "2017-01-14T19:36:43Z")
By George, I think you’ve got it ! Now, as soon as you bring this information to someone who cares, the Trump presidency will crash in a blazing ruin, like the End of Nineveh and Humpetty-Trumpetty will fall off the wall. ---
**Author:** ![Pantastic](https://avatars.discourse-cdn.com/v4/letter/p/3bc359/32.png) [@Pantastic](https://boards.straightdope.com/u/Pantastic)\ **Post date:** [January 14, 2017, 7:49pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/7 "2017-01-14T19:49:52Z")
> [@Happy\_Lendervedder](#): > > What about promoting one? He tweeted that everyone should go out and buy from LL Bean because of the board member’s campaign donation. That doesn’t seem kosher. You should bring that up to the highest office in the US, the presid… oh. Well, congress can impeach him… oh, but they’re all from his party and cheering him on. Maybe you could appeal to the voters, but he won the election just over two months ago so I’m not sure how much traction that will get. Trump is doing and planning to do a lot of things a lot worse than ranting and raving about companies on twitter, I really doubt that trying to get people agitated about something that’s probably legally covered by the first amendment is going to go anywhere. ---
**Author:** ![Trinopus](https://avatars.discourse-cdn.com/v4/letter/t/2bfe46/32.png) [@Trinopus](https://boards.straightdope.com/u/Trinopus)\ **Post date:** [January 14, 2017, 10:13pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/8 "2017-01-14T22:13:41Z")
> [@Me\_Billy](#): > > Interesting. There are laws about “insider trading”, but I don’t think Trump or anyone getting prior information from him would be considered an “insider”? . . . [Advance knowledge of something like that is the definition of an insider.](http://www.investopedia.com/terms/i/insidertrading.asp) (Warning: contains auto-start video.) If I sell off a ton of my Canopus Corporation stock, because Trump has told me he’s going to sell off all of his Canopus stock, I’m participating in “insider trading.” In moral terms, the same is true if he tells me he’s about to trash Canopus in his next tweet. I’m not totally sure about the legality, but it is insider trading. (Not all insider trading is illegal!) (When I worked for Canopus – or someone similar – we employees were frozen in our trades of company stock in advance of a corporate merger. We “knew too much,” and were not allowed to take advantage of it.) ---
**Author:** ![Evan\_Drake](https://avatars.discourse-cdn.com/v4/letter/e/b487fb/32.png) [@Evan\_Drake](https://boards.straightdope.com/u/Evan_Drake)\ **Post date:** [January 14, 2017, 10:44pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/9 "2017-01-14T22:44:56Z")
> [@wevets](#): > > It occurs to me that this kind of market manipulation would be a gold mine for anyone who knows in advance about Trump’s tweets. I don’t think Trump himself knows what he will tweet 10 minutes ahead of time. Besides, Insider implies secrecy: anything publicly announced to anybody on the Web is not conspiracy. If Trump, or Obama, declared he was gonna short a company or drive down the price to a relation, it would be impossible to prove. George W. and Hillary both had strong ties to Enron, a company that did some bad things; you couldn’t prove either _benefited_ from the connexion, aside from all the public donations. ---
**Author:** ![wevets](https://avatars.discourse-cdn.com/v4/letter/w/e9a140/32.png) [@wevets](https://boards.straightdope.com/u/wevets)\ **Post date:** [January 14, 2017, 10:55pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/10 "2017-01-14T22:55:50Z")
> [@Tom\_Tildrum](#): > > No, it’s not illegal for public figures to criticize corporations. Did you read the OP? The first question is whether a staffer who knew in advance what Trump was going to tweet about would violate insider trading laws if s/he made stock trades based on that knowledge. The second question imagines a hypothetical collaboration - I’m going to publicly shellack this company on twitter - you take advantage of the change in stock price. The third is a question of civil litigation based on the stock price change after tweeting. The First Amendment doesn’t protect the staffer in the first question if the stock trade is illegal, because the staffer isn’t speaking - there’s no speech issue protecting stock trades. The First Amendment also doesn’t protect the friend/family member in the second question, because the friend/family member isn’t speaking - again, no speech issue. I don’t know if the First Amendment protects the speaker in the second question based on a hypothetical conspiracy, assuming the conspiracy wasn’t so difficult to prove that a hypothetical prosecutor would just give up (assume there’s audio tape or uninvolved witnesses.) The First Amendment might protect the tweeter from civil action in the third question, but given that defamation and libel laws still exist, it seems unlikely the First Amendment prevents civil actions based on libel or defamation. ---
**Author:** ![rbroome](https://avatars.discourse-cdn.com/v4/letter/r/838e76/32.png) [@rbroome](https://boards.straightdope.com/u/rbroome)\ **Post date:** [January 16, 2017, 5:36pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/11 "2017-01-16T17:36:24Z")
I seriously doubt Trump is going to suddenly start being responsible in his comments. Tweets or not. His comments will move markets. He and his friends have large commitments in the markets (I know Trump sold his stocks last summer. His properties and world-wide investments remain and will fluctuate). He shouldn’t make comments precisely because they influence the markets. He isn’t going to suddenly stop. Ethics officers and SEC people are going to make strong comments, which will be ignored. His popularity won’t be effected one way or the other by the money being made on his comments. So, will a cottage, or penthouse in this case, industry grow up to take advantage of his comments? Will traders get up at 2AM to read the latest tweet and make bets in the market? Will anyone get in trouble for it? ---
**Author:** ![Okrahoma](https://avatars.discourse-cdn.com/v4/letter/o/90db22/32.png) [@Okrahoma](https://boards.straightdope.com/u/Okrahoma)\ **Post date:** [January 16, 2017, 6:02pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/12 "2017-01-16T18:02:35Z")
If the question is about legalities, the definition of “insider trading” is “buying or selling of a security by someone who has access to material nonpublic information about the security”. “Nonpublic” - yes, Trump’s opinion is nonpublic before it is tweeted out to the world. “Material” is “any information about a company or its products that is likely to change the perceived value of a security when it is disclosed to the public.” Arguably, Trump’s **opinion** about a company is not “material information”, thus trading based on it even before it becomes public is not “insider trading”. ---
**Author:** ![Okrahoma](https://avatars.discourse-cdn.com/v4/letter/o/90db22/32.png) [@Okrahoma](https://boards.straightdope.com/u/Okrahoma)\ **Post date:** [January 16, 2017, 6:03pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/13 "2017-01-16T18:03:37Z")
> [@rbroome](#): > > So, will a cottage, or penthouse in this case, industry grow up to take advantage of his comments? Will traders get up at 2AM to read the latest tweet and make bets in the market? Will anyone get in trouble for it? By definition, a trader cannot get in trouble for trading based on publicly available information. ---
**Author:** ![rbroome](https://avatars.discourse-cdn.com/v4/letter/r/838e76/32.png) [@rbroome](https://boards.straightdope.com/u/rbroome)\ **Post date:** [January 16, 2017, 6:36pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/14 "2017-01-16T18:36:12Z")
> [@Okrahoma](#): > > By definition, a trader cannot get in trouble for trading based on publicly available information. that makes sense. As is so often the case with Trump, things that look to me as improper/illegal turn out to be neither. Different though. Very different. I guess that is why he got elected. ---
**Author:** ![Bricker](https://avatars.discourse-cdn.com/v4/letter/b/977dab/32.png) [@Bricker](https://boards.straightdope.com/u/Bricker)\ **Post date:** [January 16, 2017, 6:39pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/15 "2017-01-16T18:39:13Z")
Here is a discussion relevant to question 3: [Link.](http://boards.straightdope.com/sdmb/showpost.php?p=19855831&postcount=15) ---
**Author:** ![DrCube](https://avatars.discourse-cdn.com/v4/letter/d/a3d4f5/32.png) [@DrCube](https://boards.straightdope.com/u/DrCube)\ **Post date:** [January 16, 2017, 11:23pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/16 "2017-01-16T23:23:36Z")
And if Trump himself trades on these tweets moments before he clicks “post”? Is _that_ insider trading? As in “Boy this next tweet will be a doozy for the folks at GM. Bigly. I better divest my portfolio of GM shares before this tremendous tweet causes them yuge losses.” Even if practically, no one will actually arrest the President for insider trading, does a pattern of selling stock before tweeting negative things about the company count as insider trading? Assuming this is after the clear pattern of “Trump tweets = stock market losses” continues and is well understood? ---
**Author:** ![Okrahoma](https://avatars.discourse-cdn.com/v4/letter/o/90db22/32.png) [@Okrahoma](https://boards.straightdope.com/u/Okrahoma)\ **Post date:** [January 17, 2017, 12:07am UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/17 "2017-01-17T00:07:39Z")
> [@DrCube](#): > > And if Trump himself trades on these tweets moments before he clicks “post”? Is _that_ insider trading? No, it isn’t. People whose opinions may influence the markets (for example, highly rated stock analysts) do that all the time. Besides, AFAIU Trump has sold all his stocks. ---
**Author:** ![wevets](https://avatars.discourse-cdn.com/v4/letter/w/e9a140/32.png) [@wevets](https://boards.straightdope.com/u/wevets)\ **Post date:** [January 23, 2017, 8:06pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/18 "2017-01-23T20:06:34Z")
> [@Bricker](#): > > Here is a discussion relevant to question 3: > > [Link.](http://boards.straightdope.com/sdmb/showpost.php?p=19855831&postcount=15) Thanks, **Bricker** , that is a helpful discussion. > [@DrCube](#): > > And if Trump himself trades on these tweets moments before he clicks “post”? Is _that_ insider trading? As **Okrahoma** (thanks also for your input on the question, **Okrahoma** ) noted, anything that’s public (like a tweet) can’t be insider trading because there’s nothing ‘insider’ about it, and anything a person does themselves also can’t be insider trading, or businesspeople wouldn’t be able to do anything. Trump did [divest himself of all publicly-traded stocks](https://www.washingtonpost.com/business/economy/trump-sold-all-shares-in-companies-in-june-spokesman-says/2016/12/06/55419d44-bbcf-11e6-94ac-3d324840106c_story.html?utm_term=.61ac9acee52c) back in June of 2016. More interesting is the possibility of wrongdoing where John Doe, working in Trump’s office, hears him rant about how he hates the Lockheed Martin contract and is going to rip it up. Then, before Trump does his late-night/early-morning Twitter session, Doe sells all his L-M shares, and buys them again after the tweets have come out - making cash from the sale, and still holding all the L-M stock he bought at 2% less than what it was worth that afternoon. This appears to be illegal under the STOCK Act, which I’m surprised no one brought up yet: > [@wikipedia](#): > > Section 6 > > Amends the Ethics in Government Act of 1978 (EGA) to require specified individuals to file reports within 30 to 45 days after receiving notice of a purchase, sale, or exchange which exceeds $1,000 in stocks, bonds, commodities futures, and other forms of securities, subject to any waivers and exclusions. Lists such individuals as: (1) the President; (2) the Vice President; (3) executive officers or employees, including certain special government employees and members of a uniformed service; (4) appointed administrative law judges; (5) executive branch employees in positions excepted from the competitive service because of their confidential or policymaking character (except those excluded from such exception by the Director of the Office of Government Ethics [OGE]); (6) the Postmaster General, the Deputy Postmaster General, each Governor of the Board of Governors of the U.S. Postal Service, and certain U.S. Postal Service officers or employees; (7) the OGE Director and each designated agency ethics official; (8) civilian employees of the Executive Office of the President (other than a special government employee) appointed by the President; (9) Members of Congress; and (10) congressional officers and employees. From the [wikipedia summary](https://en.wikipedia.org/wiki/STOCK_Act#Official_summary). ---
**Author:** ![Richard\_Pearse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/richard_pearse/32/13144_2.png) [@Richard\_Pearse](https://boards.straightdope.com/u/Richard_Pearse)\ **Post date:** [January 23, 2017, 9:28pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/19 "2017-01-23T21:28:06Z")
> [@Okrahoma](#): > > By definition, a trader cannot get in trouble for trading based on publicly available information. You are missing the point. The trading happens before the tweet, i.e. Before the information is public. The hypothetical trading is done on the basis of knowledge of what the tweet will be. ---
**Author:** ![Okrahoma](https://avatars.discourse-cdn.com/v4/letter/o/90db22/32.png) [@Okrahoma](https://boards.straightdope.com/u/Okrahoma)\ **Post date:** [January 23, 2017, 9:31pm UTC](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114/20 "2017-01-23T21:31:17Z")
> [@Richard\_Pearse](#): > > You are missing the point. The trading happens before the tweet, i.e. Before the information is public. The hypothetical trading is done on the basis of knowledge of what the tweet will be. Did you look at the post that I was responding to? It had nothing to do with “before the tweet”. Also, any trader’s opinion on the company, positive or negative, is not “insider information”. Insider information has to be “material”. Opinions aren’t. [Next page](https://boards.straightdope.com/t/legal-ramifications-of-trumps-twitter-stock-trading/777114.md?page=2)