Trading Surges Ahead of Trump Family Appointments: A Case for Regulatory Scrutiny

In late 2024 and early 2025, two relatively obscure U.S.-listed companies—Unusual Machines (NYSE American: UMAC) and Dominari Holdings (Nasdaq: DOMH)—experienced significant surges in share price and trading volume preceding announcements of Donald Trump Jr. and Eric Trump joining their advisory boards. These atypical market movements raise questions about potential information leaks and the adequacy of current regulatory frameworks.​

Market Movements and Appointments

Unusual Machines, a drone manufacturer, saw its share price nearly triple in the four weeks leading up to the November 27, 2024, announcement of Donald Trump Jr.'s advisory role. Average daily trading volume increased from 93,000 shares (March–October 2024) to 290,000 shares in the month preceding the disclosure .​

Similarly, Dominari Holdings, a fintech and securities firm, experienced a 580% share price increase in the six weeks before announcing on February 11, 2025, that both Trump brothers had joined its advisory board . Trading volume surged from an average of 11,700 shares (March–December 2024) to 1.2 million shares in the lead-up to the announcement.​

Insider Transactions and Potential Conflicts

Disclosures revealed that each Trump brother received 966,000 shares in Dominari, representing 6.7% of the company, prior to their appointments . In Unusual Machines, Donald Trump Jr. held 200,000 shares issued under a restricted stock unit agreement and advisory agreement, in addition to purchasing 131,000 shares.​

Notably, Dominari Securities LLC, a subsidiary of Dominari Holdings, served as the lead underwriter for Unusual Machines' $5 million initial public offering in February 2024 . This interconnectedness between the two companies and the Trump family raises concerns about potential conflicts of interest and the possibility of information asymmetry.​

Regulatory Considerations

The Securities and Exchange Commission (SEC) defines insider trading as buying or selling a security in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. The unusual trading activity preceding the public announcements of the Trump brothers' appointments could suggest that material nonpublic information was accessed and acted upon by individuals beyond the immediate circle of insiders.​

While Unusual Machines stated that knowledge of Trump Jr.'s planned involvement was limited to three senior officers, its board, and counsel, and that there was "no reason to believe that any of these people breached any duty," the significant increase in trading volume suggests otherwise .​

Historical Context

This is not the first instance where companies associated with the Trump family have experienced unusual market activity. In October 2021, the announcement of a planned merger between Trump Media & Technology Group and Digital World Acquisition Corp led to a 580.9% surge in the SPAC's stock price, with trading volume spiking significantly . Subsequent investigations resulted in insider trading charges against individuals who profited from the information before it became public .​

MY ANALYSIS

From an investment perspective, these incidents highlight the risks associated with companies that may be subject to volatility due to high-profile affiliations rather than fundamental business performance. Investors should exercise caution and conduct thorough due diligence, particularly when market movements appear disconnected from underlying financial metrics.​

Furthermore, the potential for information leakage and the challenges in enforcing insider trading regulations in such scenarios suggest a need for enhanced transparency and stricter controls within corporate governance structures. As the lines between business, politics, and media continue to blur, maintaining the integrity of financial markets becomes increasingly complex yet essential.

Conclusion

The pre-announcement surges in share price and trading volume for Unusual Machines and Dominari Holdings, coupled with the Trump family's subsequent appointments and equity stakes, present a compelling case for regulatory scrutiny. These events underscore the importance of robust insider trading laws and the need for vigilant enforcement to maintain market integrity.​