Legal AF by MeidasTouch - Trump Company MISSES Critical Disclosure After GUILY Verdict

Episode Date: June 7, 2024

Trump’s criminal conviction caused an impairment of his media company’s “good will” that should have been disclosed under securities laws but hasn’t been. Michael Popok using his Wall Street legal experience breaks it all down. Get up to 40% off for a limited time when you go to https://shopbeam.com/LEGALAF and use code LEGALAF at checkout! Visit https://meidastouch.com for more! Join us on Patreon: https://patreon.com/legalaf Remember to subscribe to ALL the MeidasTouch Network Podcasts: MeidasTouch: https://www.meidastouch.com/tag/meidastouch-podcast Legal AF: https://www.meidastouch.com/tag/legal-af The PoliticsGirl Podcast: https://www.meidastouch.com/tag/the-politicsgirl-podcast The Influence Continuum: https://www.meidastouch.com/tag/the-influence-continuum-with-dr-steven-hassan Mea Culpa with Michael Cohen: https://www.meidastouch.com/tag/mea-culpa-with-michael-cohen The Weekend Show: https://www.meidastouch.com/tag/the-weekend-show Burn the Boats: https://www.meidastouch.com/tag/burn-the-boats Majority 54: https://www.meidastouch.com/tag/majority-54 Political Beatdown: https://www.meidastouch.com/tag/political-beatdown Lights On with Jessica Denson: https://www.meidastouch.com/tag/lights-on-with-jessica-denson On Democracy with FP Wellman: https://www.meidastouch.com/tag/on-democracy-with-fpwellman Learn more about your ad choices. Visit megaphone.fm/adchoices

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It's Michael Popak, Legal AF. I'm going to use my Wall Street legal experience to explain to you what's going on with Trump media. We've got another potential violation of the securities laws that has to do with the impairment of Donald Trump's goodwill or the company's goodwill as a result of the 34 felony count conviction and the failure of the Trump media group, DJT stock symbol, to disclose it to the marketplace, to disclose it to the investor community as required by the laws governing securities on different securities exchanges like NASDAQ where this stock trades. Particularly, there is a requirement

that not only every quarter, is there a actual regulatory filing that's required about a company to tell again the investing market to be completely transparent and so that there is an even playing field. There's not only a requirement every quarter, there's not only a requirement every quarter, there's not only a requirement

to release quarterly financials, but in between the quarterly financials, whenever a material event occurs, especially one that impacts the goodwill of the company, hold that thought, then they have to make what's called an 8K disclosure. And it could be, you know, a company for instance, could be making multiple 8k

disclosures over the course of a week or 10 days or a month based on events that are rapidly happening within the company. Now, I look carefully at the 8k and other disclosures of the Trump media group. I mean, every publicly listed company has to have on their website, publicly available, not hidden anywhere, all of their securities and exchange commission, SEC filings. So it's relatively easy to go on and look at Trump media, the TMTG, Trump Media and Technology Group, trading as DJT, and find their filings.

And it was a head scratcher. So I'm like, surely after the 34 count conviction of their titular head, of the media personality around which the entire social media platform is based, for which their investing market, their investing community is putting their faith that he's been convicted of felonies related to fraud and election fraud,

that that would be disclosed by the company. And I went and looked and it's not there. I mean, it's debatable whether when he got a judge to be in a civil matter, a rapist under New York law or technical rapist, as the judge called it, because the victim couldn't tell if it was his penis or his finger that did the raping and punitive damages and a hundred million dollar judgment, okay. When his companies were hit with a $465 million civil fraud case, I would have think there's a very good argument

that that was impairment of the goodwill of the company because the goodwill is so tied together with the alter ego of Donald Trump. It is his alter ego. May not be in a legal sense, but certainly in a reality sense, it's can, you know, Donald Trump and his company are one in the same.

The fact that it has a market value, the company of $8 billion, when the company for the first quarter in 2024 had a loss of about $300 million in the first quarter, showing a loss of $322 million against a revenue, revenue of about $750,000. Okay, and so it lost $321 million and a quarter. That's how much in the red they are.

So when the company's got a market value of $8 million, its value is so connected and integrated with Donald Trump himself that my argument, and it's not an unreasonable one, is that the goodwill of the company is tied inexplicably, see, I eventually got it, inexplicably to the goodwill of Donald Trump. And when one takes a hit, the other has to. Now, some people might be saying, well, it's public that he got convicted, but that doesn't matter.

The company has to make the disclosure to the investing community, to the investing marketplace. And it's not there. Instead, as a ruse, as a smoke screen, all that's there, all that's there in the recent AK disclosure, which came out as recently as June 4th. So they knew the conviction happened. 34 counts no less.

Was David Nunes, who's the former congressperson from California who heads up this this entity, this this sham meme stock entity, complaining about the fact that short sellers are selling the stock short in terms of price trying to drive it down. Two different complaints, including another letter to the MAGA House Oversight Committee run by, who else? People like Jim Comer, asking them to do an investigation into short selling as opposed to the Securities and Exchange Commission.

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going on with the stock. There may even be naked short selling, which is not as exciting as it sounds. All that means is that a person, illegally, improperly under the securities laws, is selling stock at a price for which they do not already have a position. They don't own it, right?

But they're betting on the price being driven down, but they're not acquiring the stock at that moment. They're hoping to buy it later if they need to in order to match within a certain amount of days after the transaction that are required for you to actually tender the stock and close the transaction, right? And so they're playing a little bit fast and loose here

with the securities laws. It's called naked short selling. And I'm sure there's a bit of naked short selling going on here. And there's short sellers who are just betting on the stock to drop. I mean, the stock has dropped. We've talked about some short selling squeeze.

I mean, you would think for a company that previously disclosed that it's on the verge of bankruptcy and is on the verge of bankruptcy and it's chief executive and the entity, the media personality upon which their entire business model is based just got convicted of fraud. You not only have to disclose that, but you'd think you'd see a drop in the stock price. And you have. Since the conviction, the stock price has dropped considerably.

Of course, I'm going to put it in perspective. Since the conviction, the stock price has dropped considerably. Of course, I'm gonna put it in perspective. The stock price has dropped 8% in the last five days. It dropped 2.3% just today. It's dropped 6% over the course of the month, so that would totally capture the convictions, but it's still up for the year 157%. It's hard to believe that if you actually invested in DJT,

which is nothing more than a meme stock with no fundamentals financials underneath it, enduring financial performance underneath it for which you would invest your money. But if you had invested your money, if you had put $100 in, right in at the beginning of this whole thing, you'd have a hundred dollars plus 157 percent in your return already. I mean, it's just waiting to crash. Donald Trump's entire fortune basically at this point has been replenished by his 70 percent

ownership interest in this company that's currently valued at $8 billion, more than some companies you've heard of that have actual revenue, like Western Union and some other companies. So it's floating up there. And as soon as Donald Trump, the thing that's propping it up of course, is that Donald Trump is restricted until September

from selling any of the stock. As soon as he can sell the stock and floods the market with these shares, there's not enough buyers on the other side to keep the price up, boom. And he's gonna need to sell a billion dollars worth of stock. I mean, even Elon Musk, when he sold Twitter stock years ago, it crashed.

And at least it dropped considerably because of the sale. So when Donald Trump sells one billion of his dollars, his stock position, watch what happens to the stock price. So the Securities and Exchange Commission, I am sure, already have an open file on this stock. They've had it since before it went public. There are already people serving time in jail

for insider trading related to DJT before it went public, after it went public, just after it went public. So insiders who were on the board and otherwise of the acquirer who was a public company, that was a public company, or already went to jail. Everybody in Donald Trump's life around him end up going to jail and or losing their professional licenses. And this media company is no different. You had insider trading, you had the Securities

and Exchange Commission that held up the merger of the SPAC, the Special Purpose Acquisition Company that was acquiring a publicly traded SPAC that was acquiring Donald Trump's company in order to take it public without having to go through all of the regulatory requirements to take a company public. They were already on the radar with the Securities and Exchange Commission who held it up for a year because of obviously there was violations of the securities laws because of the run-up and the stock indicated that most people knew

that the special purpose acquisition company was acquiring Donald Trump's company when they were not supposed to know that. Right. And so this has been an open file for the Securities and Exchange Commission since it went public in March. And now, you know, if I'm the Securities and Exchange Commission, I pick up the phone and I call up as the regulator, I call up Trump Media and its lawyers, its outside lawyers, and say, we got a problem. Where is your disclosure related to the 34 felony counts? Why isn't that? Let's have a conversation. Why isn't that an impairment of the goodwill of the company? Since you have no other assets, since you are on the verge of bankruptcy,

since your stock trades at not even multiples of your revenue. I mean, if you want to do multiples of the money that you brought in, it brought in $700,000 and it's worth 8 billion, right? That's the multiple. And since it does that, it has to be tied to the ego and the persona and the alter ego of Donald Trump

and anything that happens to him in the real world, the world of the court system, civil and criminal has to be disclosed on these 8k securities and exchange filings. That would be the discussion I'd be having if I were Gary Gensler, the head of the Securities and Exchange Commission and anybody within that office that's covering and regulating Donald Trump in the securities field. I've said it before, one of the worst mistakes Donald Trump may have ever made but because he got greedy and his eyes got really wide about how much money he could make by making suckers buy his stock, but now he's in the world of a regulated entity. And if he thinks that the issue that's been up for grabs

with the New York appellate courts about him being barred from ever serving as a officer or director of a company, if he thinks that he's going to be able to avoid that kind of scrutiny with the Securities and Exchange Commission, he's got another thing coming. It's another reason the restoration of the Trump presidency can't happen. You have to have the checks and balance of having an appropriate SEC, an appropriate five member, five commissioner group of the Securities and Exchange Commission on there in order to keep Donald Trump honest.

I know that's an impossible task, but we have to try. And so I'll continue to follow things that I observe about his business performance, about his stock performance. I've got a background in it. As people know, I was a top lawyer for a financial services firm before I went back into private practice. So I wanna use that experience

and bring it to you right here on the Midas Touch Network and on Legal AF. Follow me, Michael Popok on all things social media at MSPopok. My playlists for all of my hot takes are over on this Midas Touch YouTube channel. Slide over to playlists, slide over to contributors, you'll find Michael Popok.

And then every Wednesday and Saturday, we have a podcast that Ben Mycelis and I named four years ago, Legal AF. And we did that for a reason. And it's on Wednesdays and Saturdays at 8 p.m. Eastern time, right here on this YouTube channel that you can free subscribe to, and then pick up on all major podcast platforms. And we sit at the intersection of law and politics. It's lawyers talking about things. We know what we're talking about as experienced trial lawyers and former prosecutors and defense lawyers in the courtrooms that we talk about.

And we bring it to you right here, only on, exclusively on the Midas Touch Network. So until my next hot take, until my next Legal AF, this is Michael Popak reporting. Hear ye, hear ye, Legal AF Law Breakdown is now in session. Go beyond the headlines and get a deep dive into the important legal concepts you need to know and we discuss every day on Legal AF.

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