San Francisco has sued Donald Trump’s Truth Social platform for selling early access to the US president’s posts.
The lawsuit describes the Truth API service, which costs customers $100,000 per month, as a “corrupt business scheme” that represents insider trading.
The posts can include announcements of government decisions that can move markets, such as news about trade tariffs, central bank policy and announcements about foreign policy decisions.
Early access can offer significant financial gain for Trump Media and those getting preferential access to information before the general public, the lawsuit claims.
“Trump Media created a marketplace that enables insider trading, which Trump directly profits from,” San Francisco Attorney David Chiu said in a statement.
“This scheme turns the public trust into private profit. It is corruption, plain and simple.”
Shortly after announcing the Truth API service in July, Trump Media revealed that more than 10 high-speed trading organisations had signed up, generating more than $10 million in annual revenue.
Trump Media, of which Trump is the majority and controlling shareholder, is accused of violating the public trust and California’s Unfair Competition Law by facilitating Trump’s use of nonpublic information for private profit.
The lawsuit also noted that the high monthly fee priced out regular investors in favour of wealthy Wall Street firms.
“These everyday investors are placed at a substantial disadvantage to sophisticated firms willing and able to pay extraordinary sums for advanced access to market-moving information,” the lawsuit states.
“Trump Media’s scheme is unprecedented in its monetisation of nonpublic information obtained through government service and sold on the private market.”
The lawsuit aims to block Trump Media from offering the Truth API service and to impose a financial penalty for each violation of state law.
Trump Media has claimed that Truth API is no different to a standard subscription service.
The Independent has reached out to Truth Social for comment.
A spokesperson for the social network told CBS News Bay Area: “The people of California should outsource their future lawsuits to AI chatbots who, unlike the left-wing activists masquerading as attorneys who filed this lawsuit, will grasp the basic distinction between public and nonpublic information.”
