Partners at the Wall Street firm backing Donald Trump’s social media platform Truth Social used company funds to pay for prostitutes, abused drugs, partied with strippers and lost millions of dollars gambling, according to a new report in the Wall Street Journal.
EF Hutton is also being investigated for securities fraud, and investors have accused its brokers of pushing speculative investments, according to competing lawsuits filed by two of the firm’s partners.
The company specializes in taking risky start-ups public—including Truth Social’s parent company.
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After Twitter banned Trump in 2021 for lying about the 2020 election results, most banks avoided deals involving the former president. But in Oct. 2021, Trump announced the formation of Trump Media & Technology Group through a merger with a shell company underwritten by EF Hutton.
Trump Media’s lone product, Truth Social, was launched in Feb. 2022.
This April, EF Hutton helped take Trump Media public. To celebrate, the firm hosted a party in Palm Beach, Fla., and one of the founding partners capped off a night of partying by accidentally using company funds to pay a prostitute $500, according to one of the lawsuits.
When the payment set off alarms at the firm, the partner allegedly tried to cover it up.
Asked for comment by the Wall Street Journal, a Trump spokesperson said, “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.”
Trump owns 59 percent of Trump Media stock, the value of which tends to fluctuate according to the Republican presidential candidate’s prospects for re-election. The company lost a staggering $58 million in 2023, according to SEC filings, despite claiming to be valued at several billion dollars.
Internal whistleblowers have also accused Truth Social’s parent company of hiring foreign contractors instead of Americans—despite Trump’s campaign promise to impose stiff tariffs on companies that outsource labor abroad.
