ICYMI: The Tiny Bank Enriching the Trump Bros

Bloomberg News Wealth Reporter Annie Massa speaks on Dominari, the tiny investment bank that, less than three years ago, pivoted from developing cancer therapies into finance. Since then it has lost about $70 million.
For years its shifting priorities and tribulations remained largely out of the spotlight. That changed when it gained two recognizable backers: Donald Trump Jr. and Eric Trump.

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Bloomberg Audio Studios, Podcasts, radio news.

Speaker 2 (00:07):
This is Bloomberg Business Week with Carol Masser and Tim
Stenovek on Bloomberg Radio. Well, if you go up to
the twenty second floor of Trump Towel, you'll find a
company called Dominari Holdings. It's the operator of a tiny
investment bank that less than three years ago pivoted from
developing cancer therapies and went into finance. Since then, it's

(00:29):
lost about seventy million dollars. Yeah, that is a pivot. Anyway,
guess who's involved in this read on Please okay? Well,
one of its senior executives was named in a now
settled complaint alleging boiler room style business practices at an
earlier employer. It's now been stockpiling bitcoin for years. It's
shifting priorities and tribulations remain largely out of the spotlight.

(00:51):
That change though, when it gained two recognizable backers, Donald
Trump Junior and Eric Trump. Annie Masa is Bloomberg News
Wealth reporters. He writes about Dominari Holdings, and she joins
us here in our Bloomberg Interactive Brokers studio. You followed
the money in this case.

Speaker 3 (01:09):
That's right. So a bunch of things that have had
a bunch of announcements have come out over the past
couple of months involving the Trump brothers, and it can
be hard to keep up with them almost So Trump's
two eldest sons joined the advisory board of this small
company called Dominari, and it wasn't a company that I'd
heard of before. So we basically just started looking into

(01:32):
its financials and you don't have to look forward to
see its headquarters, which is right in Trump Tower. And
it's business model, which is, as you said, a little
bit unusual. It's done a hard pivot from biotech and
developing anti cancer therapies to investment banking and underwriting IPOs.
And so we dug a little.

Speaker 1 (01:52):
Bit further, how did it to Trump's sons or two
of the Trump sons, Eric and Don Junior get involved.

Speaker 3 (02:01):
They joined in February the advisory board, so they've become
advisors to the company.

Speaker 1 (02:06):
But there are also already located in Trump Tower or
like has it always been in Trump Town?

Speaker 3 (02:10):
It was already in Trumptown, but it does have other
Trump organization connections beyond that as well. In December, after
President Trump was re elected. Of course, Ron Lieberman, who's
also an executive at the Trump organization, joined the actual
board of directors of this company, so there's that connection.
There are also other executives from the Trump organization, including

(02:32):
the chief legal officer, who own large stakes worth getting
up into the millions of dollars combined in this company.
So there are all these ties back to the Trump organization.
Stepping back, what Dominari does though, is it underwrites IPOs
that can be seen as kind of I mean they're

(02:54):
penny stock IPOs basically, and the company loses money. And
that's what kind of I found compelling about it and
compelling about the story. What do the Trumps see in
this company? Do get involved?

Speaker 2 (03:11):
Okay, so they've been involved only for a few months.
They're compensated very well according to your reporting, Talk a
little bit about that and maybe answer the question that
you found what do they see in this company?

Speaker 3 (03:22):
Right? Well, what Eric Trump has said is that Dominari
so Dominari I did interview the CEO of the finance
arm of this company in February and he said the
Trump's are friends and that he was a member of
their golf club in Jupiter, Florida. The Trumps have said

(03:42):
the Trump Organization didn't respond to our request for comment,
but in other news outlets, Eric Trump has said that
the Dominari, the Dominari has brought them great deals in
the past and that they've been involved in great things together.
So they speak highly of each other. But it is

(04:05):
a phenomenon when you look at what happens with the
Trump with the Trump's joining as advisors to some of
these companies like Dominari, there's a pattern which is that
the shares tend to spike because an announcement hits that
they're involved, and then the shares tend to spike. And
that's exactly what played out with Dominari. Shares of the company,

(04:27):
because it trades for kind of low dollar value, spiked
more than eighty percent that day when the Trump's joined,
so that in turn makes their stake worth more.

Speaker 1 (04:35):
I mean, the stock is up almost five hundred percent
year to date, right, I'm reading that correctly. You're right,
it's like a five dollars five dollars sixty price, So
you're talking.

Speaker 3 (04:44):
About a stock, right, You're talking about a very low
price stock.

Speaker 1 (04:46):
Correct, But it's still like crazy and if somebody had
put money in early on, potentially could could have earned
a lot of money. I guess what's interesting going back
to the IPOs is you say the IPOs that it's
been involved in since shifting to banking. You guys note
in your reporting about one third of plunge more than

(05:07):
seventy five percent. According to a Bloomberg analysis, some lost
almost all of their value in less than a year
of hitting public markets, and many are based in Hong
Kong and China and trade as penny'stocks. I mean, to
be fair, like those of us who've been doing this
a long time, like when we see a name like
that or where it trades, we tend to be somewhat
dismissive because it usually doesn't pan out to be much

(05:29):
and I think that's safe to say, right. So it's
just interesting that that tends to be their business practice.

Speaker 3 (05:35):
Yeah, you could look up the IPOs that the company
that Dominari has underwritten recently, and some of them you'll
see the classic pop and then roll off. And we
found several where they lost almost all of their value
after the IPO. So, I mean, it does raise questions

(05:55):
about the quality of some of those IPOs that it's
under right now.

Speaker 1 (06:00):
I mean, what did you want to know Annie and
you guys reporting this out? What answers did you feel
like you felt like you got some information? And what
things kind of still are questionable or that you still
like got I still would like greater answers or more,
you know, more information about some things.

Speaker 3 (06:15):
Well, there's a lot there. So you have this relationship
between the Trump's and the Trump organization and this company
that's done this big pivot. The other reason that it's
become relevant recently is it is involved in one of
the crypto transactions that Eric Trump and Donald Trump Junior

(06:37):
have done. So there are a lot to keep track of.
We won't go into all of their various crypto ventures,
but one that has maybe flown under the radar a
little bit in comparison to something like World Liberty Financial,
which is a separate company that they promote has nothing
to do with Dominori. Dominori created this American data centers

(06:58):
unit that then became a coin mining company very shortly thereafter.
The Trumps are involved in that as well, or were
named in that kind of release as well. So it's
spinning off new businesses and that's supposed to ipl so
that creates another opportunity for potential profit and an increasingly

(07:20):
perhaps complex web of financial ties.

Speaker 2 (07:24):
Just thirty seconds. The Trump family has pushed back on
questions about conflicts around this given their proximity to the president.
Did you get any commentary from them about this?

Speaker 3 (07:33):
That's right. Their opinion and what they've said on the
record is there aren't conflicts here. And what Donald Trump
Junior has been very vocal about is that he says,
I've been a businessman my entire life. It doesn't matter
I'm providing for my children. I've been a businessman my
entire life. And that's his perspective on it.

Speaker 1 (07:55):
Just fascinating interesting, right, everything it seems like now, and
to be fair, things that wouldn't probably be on our radar,
but you know, they are the sons of the president,
and so just kind of tracking all of this stuff.
Great detail in this story. Highly recommend you check it out.
Annie Massa, thank you, as always well for reporter here
at Bloomberg News. Right here in our interactive Brokers