T Stamp Inc (NASDAQ:IDAI, EURONEXT:AIID), doing business as Trust Stamp, announced that its board of directors is looking into measures to address potential illegal short selling of the company’s stock, which will include the engagement of forensic experts, as well as working with other listed companies and their counsel that have identified similar trading activity in their shares.
The provider of AI-powered identity services said it believes certain individuals and/or companies may have engaged in illicit naked short selling that may have artificially depressed the company’s stock price.
"Our concerns as to possibly illicit short selling activities were reinforced when the Securities and Exchange Commission (SEC) exercised its powers under Regulation SHO to place the stock on the 'Threshold List' as a consequence of failures to deliver that can in some instances be indicative of naked shorting," Trust Stamp CEO Gareth Genner said in a statement.
Trust Stamp noted that inclusion on the Threshold List signifies that for five consecutive settlement days, there had been a failure to deliver at least 10,000 shares, which also had to comprise at least 0.5% of the company’s total shares outstanding.
It added that over the last month, a “very large proportion” of T Stamp’s trading volume has been short sales and it is reasonable to assume that this shorting activity may have artificially depressed the stock price.
Trust Stamp further stated that it is proactively cooperating with the SEC, US Department of Justice, FINRA and Nasdaq in respect of enforcement action that can be pursued against any bad actors that are identified.
Naked short selling is the practice of short-selling a tradable asset of any kind without first borrowing the asset from someone else or ensuring that it can be borrowed.
Trust Stamp is a global provider of AI-powered identity services for use in multiple sectors including banking and finance, regulatory compliance, government, real estate, communications, and humanitarian services.
Contact Sean at sean@proactiveinvestors.com