Why Donald Trump can still run his media group

David Brancaccio and Alex Schroeder Jun 6, 2024
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As a convicted felon, Donald Trump could become U.S. president again, but not a cosmetologist in the state of New York. Charly Triballeau/Pool/AFP via Getty Images

Why Donald Trump can still run his media group

David Brancaccio and Alex Schroeder Jun 6, 2024
Heard on:
As a convicted felon, Donald Trump could become U.S. president again, but not a cosmetologist in the state of New York. Charly Triballeau/Pool/AFP via Getty Images
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It’s been one week since former President Donald Trump was found guilty on 34 felony charges of falsifying business records to influence the 2016 election. He is scheduled to be sentenced on July 11.

Among the many questions this raises: What’s to become of the publicly traded company he heads, Trump Media and Technology Group? Can a convicted felon legally be a principal of a publicly traded company?

To find out, Marketplace’s David Brancaccio spoke with University of Michigan business school professor Erik Gordon. He’s a former corporate attorney and also teaches law. Below is an edited transcript of their conversation.

David Brancaccio: I mean, it’s not an abstract question here …

Erik Gordon: Oddly enough, you can be CEO of a giant public company, subject to thousands of pages of regulation that’s written in Greek, even if you are a convicted felon. Even if you’re a convicted felon of, for example, falsifying business records.

Brancaccio: But there are other occupations where you can’t keep your job if you have this felony on your record.

Gordon: Yeah, you could be CEO of the largest public company in the world, but you can’t be a cosmetologist. You can’t do people’s fingernails or color their hair.

Brancaccio: In New York.

Gordon: In New York. It’s a New York State rule. And of course, you know, the Trump conviction is in New York state. So at least in New York, he couldn’t be a cosmetologist. Although he could be CEO of a public company.

Brancaccio: Just to be clear legal scholars, they could also be president of the United States. But there’s something that a felon cannot be. I was looking at the Dodd Frank reform laws passed after the 2008 financial mess. And I saw some kind of exclusion here for felons.

Gordon: It’s kind of unusual. The exclusion doesn’t apply to public companies. But if you’re raising money as a private company, you haven’t had your IPO, you’re not listed on a stock exchange. You’re raising money privately, which a lot of companies are doing now. I mean, they raised billions of dollars privately. You can’t take advantage of the SEC regulation that most people use to make that possible if you are a felon or other bad actor.

Brancaccio: That might have affected former President Trump back when Trump Media and Technology was privately held, but the whole point is it fairly recently became a public company, so this doesn’t apply. I suppose maybe in the future, if Donald Trump were interested in getting involved with a privately held company, this could be an impediment.

Gordon: If he doesn’t win the appeal, he’s not going to be an officer of a privately held company because it will be so difficult for that company to raise money under the federal security laws. Under the Dodd Frank thing that you mentioned.

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