Trump’s Public Statements on DJT and Trading Halts: An Analysis of Normal Market Regulation
On September 13, following Donald Trump's public statement that he was not selling his shares of DJT (a majority-owned company whose ticker symbol is DX), the NASDAQ halted trading on the stock. Trump then posted on social media questioning the authority behind this action. This incident raises the question, is this a common practice in stock market regulation?
Understanding Stock Exchange Regulations
The cessation of trading on DJT shares is not an unusual occurrence, as it is an established practice to halt trading in response to significant public statements or news events that could potentially manipulate stock prices. According to CNN, such halts occur multiple times each day, often in reaction to important company announcements, either positive or negative.
Market Rules and Interventions
Stock exchanges, such as NASDAQ and the New York Stock Exchange (NYSE), enforce rules regarding the permissible fluctuations in stock prices within a given timeframe. These rules are designed to prevent manipulative practices that could otherwise destabilize the market.
It is important to recognize that these halts are not a unilateral decision from any politician but a regulation that stock exchanges abide by. Trump, as a public figure, is aware of these rules but chose to voice his disapproval on social media. His frustration is more about garnering attention and maintaining public engagement than a genuine concern for market regulation.
Legal Framework and Equal Justice
The procedural mechanisms to halt trading are clearly defined and authorized by law. No one, including any politician, has the authority to interfere with these processes unless it is deemed detrimental to the public interest. For instance, the Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC) have the statutory authority to delist, stop, or suspend trading to protect the investing public.
These powers are derived from laws such as the Securities Act of 1933 and the Securities Exchange Act of 1934. Thus, stock exchanges operate within a legal framework that limits their actions based on mandates from regulatory bodies, not individual political actors.
The Rule of Law
The principle of the rule of law is a cornerstone of the legal system in the United States and other democratic nations. This principle ensures that everyone, including the President and other public figures, is subject to the law. Professor A. V. Dicey's Commentaries on the Rule of Law and Montesquieu's commentaries on the Law of England provide a historic and theoretical foundation for this concept.
The decision to halt trading on DJT shares is a clear example of the application of statutory and common law. It is a standard action taken to ensure the integrity of the financial markets and protect investors.
Conclusion
In summary, the halt in trading on DJT shares is a normal and justified action. These types of market interventions are part of the regulatory framework meant to maintain fairness, prevent manipulation, and protect the interest of investors. Donald Trump, as a public figure, should respect these legal norms and focus on substantive issues rather than challenging well-established market practices.
Everyone is equal before the law, and while it is normal for stock exchanges to halt trading under certain conditions, such actions are not subject to political whims or personal disputes. The legal framework providing such powers serves to uphold the integrity and fairness of the market, ensuring that all participants are treated equally under the law.
Further Reading
Magna Carta 1225
Professor A. V. Dicey Commentaries on the Rule of Law
Montesquieu Commentaries on the Law of England
Marbury v. Madison - The Separation of Powers of Organs of Government