George Santos Settles CFTC Case Over Trading His Own Kalshi Market

Former U.S. Rep. George Santos has settled Commodity Futures Trading Commission (CFTC) findings that he manipulated a Kalshi event contract by making misleading public statements while trading on whether he would attend President Donald Trump’s State of the Union address. Under a July 31 order, Santos must disgorge $17,569.98, pay a $17,500 civil penalty, accept a cease-and-desist order, and refrain from trading on any CFTC-registered entity for three years.

Santos opened a trading account on Kalshi on Feb. 11, funding it with about $7,000, and traded exclusively in the market on his own attendance. Between Feb. 12 and Feb. 22, he accumulated 30,874 “Yes” contracts worth $6,695.94. After he asked followers on X whether he should wear a serious or bedazzled suit, the Yes price rose from $0.15 to $0.70. Santos then sold the entire position for a $3,448.43 profit.

His airline later notified him his flight to Washington was canceled. Santos bought a train ticket and continued discussing the trip publicly. On Feb. 23, he posted a video saying he would attend, sending the Yes price back from $0.40 to $0.70. About 40 minutes later, he began buying “No” contracts. He ultimately accumulated 23,855 No contracts worth $8,650.66. His train was also canceled, but he did not disclose that publicly. On the day of the address, the Yes price collapsed, and Santos exited his No position for a profit of about $14,390.57.

The CFTC charged Santos under the Commodity Exchange Act’s anti-manipulation provision and Regulation 180.1, rather than as insider trading. The order classified the State of the Union attendance contract as a swap subject to CFTC enforcement.

Santos accepted the settlement without admitting the findings. His attorney said Santos originally expected to attend and changed his position due to winter weather, denying any intent to deceive. Kalshi said it detected the activity, froze the account, and supplied evidence to the CFTC. The exchange plans separate enforcement for rule violations and may reimburse affected traders if it recovers money from Santos.

The DOJ has denied investigating Santos since June 3, contradicting earlier reports. This leaves the CFTC settlement as the only confirmed federal action arising from the trades.

Source: https://news.bitcoin.com/igaming/george-santos-settles-cftc-case-over-trading-his-own-kalshi-market/