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Some Amazon.com Inc. shareholders may want to sue President Donald Trump for tanking the stock with his tweets. But while regulators can check to see if anyone close to the president traded ahead of his attacks on Jeff Bezos and Amazon’s contract with the U.S. Post Office, the chances of holding Trump accountable for sending Amazon shares, and the rest of the tech sector, into a nosedive are slim.
Trump has been on a constant rant against Amazon AMZN, +1.46% in the past several days, targeting the company’s shipping deal with the Post Office in particular. According to a report late Monday in Vanity Fair, Trump is “obsessed” with Amazon Chief Executive Jeff Bezos and is actively seeking ways to damage the company.
I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy. Amazon should pay these costs (plus) and not have them bourne by the American Taxpayer. Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!
— Donald J. Trump (@realDonaldTrump) April 3, 2018
Trump continued the attack Tuesday, again claiming the Post Office loses money on its deal with Amazon, even though independent analysts say it makes a profit on the deal.
“He really wants the Post Office deal renegotiated. He thinks Amazon’s getting a huge f---ing deal on shipping,” according to Vanity Fair’s account of comments from a Republican source.
Read: ‘It’s war’: Trump reportedly seeking ways to hurt Amazon
Read also: Trump’s attacks on Amazon break with history of presidents keeping hands off
The president is entitled to express his opinion even if he might get his facts wrong, absent a stock trade or a connection to the company, according to Ira Matetsky, an attorney with Ganfer and Shore. “At end of day, unless there are significant facts we don’t already know, it would be very tough for either investors or a regulator to bring a case against the president for his Amazon tweets,” Matetsky told MarketWatch.
The Wall Street Journal reported in December 2016 that Trump had sold all of his individual stock holdings that June, according to a transition spokesman. The president’s financial disclosure made on June 14, 2017, said that the value of his Amazon shares, previously held in the Donald J. Trump Revocable Trust, were valued at $0 as of April 15, and that he had received $15,000-$50,000 in capital gains from selling the shares.
If someone in the White House or close to Trump knew he would send the tweets that slammed Amazon, and found a way to dump their shares or short the stock, there could be a claim against them — and Trump himself — if he knowingly tipped them off, under insider-trading laws.
If the president had instead planned to announce cancellation of the Postal Service contract, or an order to investigate the company, a reasonable person would expect that such a specific action would have an impact on the stock price.
“If someone else with a duty to disclose sold on advance knowledge of those type of announcements, then there may be an SEC or DOJ investigation for insider trading,” according to Matetsky.
Given Trump’s penchant for early morning tweets and the tendency for White House spokespersons to tell reporters, “The president’s tweets speak for themselves,” it’s not clear if the president gave anyone a heads up so they could trade ahead.
Is the president just trying to manipulate the Amazon stock price?
“Perhaps he just wants to antagonize Jeff Bezos,” says Matetsky, “but with no evidence of any trades and no personal connection to Amazon, a stock manipulation or insider-trading case would be tough for anyone to bring.”
Amazon stayed in negative territory for most of Tuesday’s session before rebounding to end up slightly by the end of the day. The Dow Jones Industrial Average DJIA, +1.65% recovered and so did the tech sector, including Apple AAPL, +1.03% , Tesla TSLA, +5.96% and Netflix NFLX, +1.21% , after a massive selloff Monday.