BY SRH
San Francisco on Sept. 22 sued Truth Social’s parent company, arguing the social media site is part of a “corrupt business scheme” with its $100,000-a-month Truth API plan, which allows users to see Trump’s posts before they go public.
A lawsuit filed by City Attorney David Chiu in San Francisco Superior Court claims Trump Media and Technology Group benefited from the new service.
Starting Aug. 1, users will be able to pay up to $100,000 a month for early access to 10 high-profile Truth Social accounts, including that of Trump.
Chiu alleges the firm is violating the public trust and California’s Unfair Competition Law by marketing knowledge about Trump and privileged access.
In the action, Chiu said Trump Media illegally built, priced, marketed and operated a commercial engine that knows and purposefully enables Trump to use nonpublic material for his own gain.
Trump Media was also charged with further violations of federal insider trading rules, which prohibit the sale of material nonpublic information received from someone with a duty of trust and confidence to someone who would trade on it for an undue financial benefit.
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The service violates the state’s unfair competition law “because the harm they inflict far exceeds the utility of their actions,” Chiu adds.
“The defendant’s scheme allows the taking of information in public trust for personal profit,” Chiu claimed in the lawsuit.
He says the practice harms law-abiding firms and Californians who invest in retirement accounts, pensions and other public-sector assets.
“Everyday investors are at a significant disadvantage to sophisticated firms willing and able to pay extraordinary amounts for early access to market-moving information,” the lawsuit states.
Trump Media interim CEO Kevin McGurn told investors on Aug. 10 that the company had signed more than 10 client agreements for the service.
The city seeks to bar the parent company of Truth Social from offering Truth API.
Trump Media, based in Florida, declined to comment on the assertion.
Trump launched Truth Social in February 2022. He owns 41%, the majority, of the corporation.
The lawsuit says the company’s contract requires the president to wait six hours after posting on Truth Social before posting on any other social media site.
The second complaint over Truth Social’s early-access product came from San Francisco.
The social media company was sued by the Freedom of the Press Foundation and The Intercept in Manhattan federal court on Aug. 12 to halt the program, saying the president sold priority access to official material to make himself a profit.
Exec assistant, President Trump sued. Also on the list is White House deputy chief of staff and personnel office director Daniel Scavino.
Other members of the program include Vise President J.D. Vance, Health Secretary Robert F. Kennedy Jr., FBI Director Kash Patel and White House accounts.
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