Partners of the Wall Street firm behind Donald Trump’s Truth Social platform are accused of using company funds for illicit activities, including paying for prostitutes, drugs, and partying with strippers. According to two lawsuits, the firm EF Hutton, which took Trump’s media company public, also lost millions through reckless gambling.
A report from the Wall Street Journal alleges that the partners engaged in wild behavior with company funds while being involved in Truth Social’s initial public offering (IPO) earlier this year. EF Hutton, a firm that specializes in taking risky startups public, is also under investigation for securities fraud. Investors claim that the firm’s brokers were pushing speculative investments, raising further concerns.
The Scandal Behind Truth Social’s Backing
Following Donald Trump’s ban from Twitter in 2021 due to his false claims about the 2020 election, most banks distanced themselves from any deals linked to him. However, in October of that year, Trump launched Trump Media & Technology Group through a merger, with EF Hutton underwriting the deal. Trump Media’s primary product, the social media platform Truth Social, debuted in February 2022, aimed at providing an uncensored space for conservative voices.
EF Hutton celebrated its involvement in Trump Media by hosting a party in Palm Beach, Florida, in April 2024. During the event, one of the firm’s founding partners allegedly used company funds to pay a prostitute $500—a payment that triggered red flags within the firm. When questioned, the partner reportedly attempted to cover up the transaction, which now serves as a key detail in one of the lawsuits.
Financial Troubles and SEC Investigations
The issues surrounding EF Hutton extend beyond the alleged misconduct. The firm is now facing investigations from the U.S. Securities and Exchange Commission (SEC) for potential securities fraud. Investors have filed competing lawsuits against EF Hutton, accusing it of shady business practices and speculative investments.
While Truth Social was initially touted as a massive success, with Trump owning 59 percent of Trump Media stock, the financial outlook has been far from stable. SEC filings from 2023 reveal that Trump Media lost a staggering $58 million, even though the company continues to claim a multi-billion-dollar valuation. The stock value of Truth Social fluctuates depending on Trump’s political prospects, particularly his bid for re-election in 2024.
Internal Whistleblowers and Outsourcing Controversy
In addition to the financial irregularities, whistleblowers within Truth Social’s parent company have come forward with accusations that contradict Trump’s campaign promises. These whistleblowers claim that the company hired foreign contractors, outsourcing work abroad despite Trump’s vow to impose heavy tariffs on businesses engaging in such practices.
Trump’s Response
A spokesperson for Donald Trump has denied any involvement of Trump Media & Technology Group (TMTG) in the ongoing scandal. In a statement to the Wall Street Journal, they commented, “Roping TMTG into a story about events in which we played no role whatsoever is a hilarious example of this reporter’s all-encompassing biases.”
