Can the president be investigated by the SEC for stock manipulation? This year the SEC investigated Elon Musk for possible stock manipulation through social media posts, and he was ordered to stop making tweets related to his business. Today, Trump made a post that led to a major drop in the stock market. This wasn't the only time he made a post that impacted the market. Is it possible that the SEC tell the president to stop tweeting and investigate for stock market manipulation?


If you would make it illegal for celebrities to make statements which could affect the stock market in any way, you would make Twitter illegal in the first place. Especially for politicians, because everything politicians say or do can indirectly affect the stock market. Whenever a politician publicly suggests that some industry should be regulated, taxed or subsidized more or less than it was before, the stocks of the affected companies will react to that news accordingly. But making public statements about political intentions is important for a democracy, because it is the only way to have a public discussion about policy or for voters to make informed decisions about who to support.

The reason why the SEC complained about Elon Musk's use of Twitter was because he made statements about companies he managed or was a shareholder of which were allegedly fraudulent.

How would this apply to the US President?

  1. The SEC would only have a right to complain about manipulating stocks in a way which financially benefits the US President himself. They can't blame the US President for any other stock manipulation. This is, by the way, one reason why many US government officials put their private investments into a blind trust while they hold office. That way they avoid allegations that their political statements or decisions benefit their own investments. However, Donald Trump decided to not do this.
  2. There was an important court decision in 1867, Mississippi v. Johnson, where a court decided that the US Presidents are not within the reach of judicial direction when they exercise their presidential powers. Is making political statements via Twitter a part of the exercise of power of the US President? In the 21st century, probably. But I am not aware of any actual court decisions in this regard.
  3. It is questionable if a federal commission is able to indict a sitting president for any crime as long as they are in office, including for misdemeanors they committed before they took office. The conclusion of Robert Mueller's report was that this is the sole prerogative of Congress.
  • What does judicial direction mean? Maybe discretion? or purview?
    – user9790
    Aug 24 '19 at 12:11
  • @KDog "judical direction" is the wording from the source. What it means is that the President has personal immunity from the judicial process when exercising presidential powers. So no court can punish the President for a political action (this does of course not affect the ability of courts to invalidate the action itself if they find it to be against the law).
    – Philipp
    Aug 24 '19 at 12:16
  • Must be a term of legal art. Also changed Misdemeanor to Crime because the DOJ policy covers both felony and misdemeanor crimes
    – user9790
    Aug 24 '19 at 12:20
  • 1
    @Philipp I think the statement "If you would make it illegal for celebrities to make statements which could affect the stock market in any way, you would make Twitter illegal in the first place." goes a bit far... Not only celebrities tweet + I think that whoever tweets, [or makes any public statement, SNS or not] the point is if the person does that for manipulation or not. Sweden had a case [sorry, poor English in the link] about (medical) students buying + then recommending [low liquidity] listed stocks in blogs to make money, see svenskeaktier.dk/tag/manipulating-share-prices
    – Tuomo
    Aug 24 '19 at 13:52
  • 1
    @IllusiveBrian sorry if my message was badly formulated. What I tried to say was that the no matter who you are, while you can often tweet things that affect the stock market, if you time your tweets to match with your trading to try to manipulate the market and gain from that, you could at least in many countries face charges. [In a place like e.g. NYSE this may be more theoretical due to the high trading volumes. ] [The presidential immunity is of course a separate thing to consider]
    – Tuomo
    Aug 26 '19 at 3:38

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .