Loading...

Democrats Seek Insider Trading Probe After ‘Trump Chaos’ Article

October 22, 2019by Ben Bain and Matt Robinson
Democrats Seek Insider Trading Probe After ‘Trump Chaos’ Article

WASHINGTON — Democratic lawmakers are increasingly demanding that U.S. authorities investigate allegations raised in a recent magazine article that traders might be using nonpublic government information to reap huge illegal profits, even as the exchange where the transactions purportedly took place called the story “patently false.”

In a Monday letter, 14 Democratic senators urged the heads of the Justice Department, FBI, Commodity Futures Trading Commission and Securities and Exchange Commission to probe “disturbing reports of suspicious trading in our futures and equities markets” described in a Vanity Fair piece. The magazine referred to the transactions as “Trump Chaos Trades.”

Since the story’s publication, the suggestion that White House leaks could be a factor in futures traders making billions of dollars from well-timed bets ahead of major geopolitical announcements has fueled endless chatter from Washington to Wall Street. Still, the article has been met with widespread skepticism from the financial industry.

CME Group Inc., the world’s biggest futures exchange, has dismissed the claims, arguing that the trades highlighted in the story couldn’t have been based on inside information because too many market participants were involved. The article describes five big transactions in S&P 500 e-mini futures from June 28 to Sept. 13, ranging from 55,000 to 420,000 contracts.

“As it relates to the Vanity Fair article published on October 17, 2019, regarding activities in the E-mini S&P futures contract, the allegations about the trading activity are patently false,” CME said in an Oct. 18 statement.

In Monday’s letter, Democrats said they wanted federal authorities “to investigate immediately whether any rules, laws or regulations were violated.” The lawmakers added that “if any wrongdoing is uncovered, we demand that you swiftly hold violators accountable to the fullest extent possible.”

Spokesmen for the SEC and Justice Department declined to comment, while spokesmen for the FBI and CFTC didn’t immediately respond to requests for comment.

The wagers cited by Vanity Fair were made shortly before market-moving news — three times involving the U.S.-China trade war, once involving the bombing of Saudi oil fields and once involving Hong Kong politics. Thanks to market reactions, the magazine said, people involved in the transactions could’ve booked gains of between $82.5 million on the smallest to $1.8 billion on the biggest.

The story’s author, William D. Cohan, has said that finance professionals with decades of experience alerted him to the trades. Cohan, a former Bloomberg Opinion columnist, has said that factors other than illegal buying-and-selling could explain the transactions and that he doesn’t know whether any nefarious activity actually occurred.

Earlier Monday, Angus King, an independent Maine senator who caucuses with the Democrats, also called on the SEC to investigate. Last week, Democratic Reps. Ted Lieu and Kathleen Rice requested a federal investigation into the timing around sales of e-mini futures contracts before significant geopolitical events or statements from Trump.

———

Nick Baker contributed to this story.

———

©2019 Bloomberg News

Visit Bloomberg News at www.bloomberg.com

Distributed by Tribune Content Agency, LLC.

In The News

Health

Voting

Finance

More Flexibility Proposed for Student Debt Forgiveness

New rules proposed by the Biden administration on Wednesday would make it easier for borrowers to get their federal student... Read More

New rules proposed by the Biden administration on Wednesday would make it easier for borrowers to get their federal student debt forgiven through several existing programs. The action is intended to overhaul relief programs that have been criticized for their burdensome paperwork requirements and long processing... Read More

Fed Begins Inflation Fight With Key Rate Hike, More to Come

WASHINGTON (AP) — The Federal Reserve launched a high-risk effort Wednesday to tame the worst inflation since the early 1980s,... Read More

WASHINGTON (AP) — The Federal Reserve launched a high-risk effort Wednesday to tame the worst inflation since the early 1980s, raising its benchmark short-term interest rate and signaling up to six additional rate hikes this year. The Fed's quarter-point hike in its key rate, which it... Read More

February 24, 2022
by Tom Ramstack
Markets Drop as Russia Invades Ukraine and Sanctions Follow

WASHINGTON — Russia’s attack on Ukraine sent most global stock markets downward Thursday as threats of economic sanctions continued among... Read More

WASHINGTON — Russia’s attack on Ukraine sent most global stock markets downward Thursday as threats of economic sanctions continued among world leaders. “We’re going to impair their ability to compete in the 21st century high-tech economy,” President Joe Biden said at a White House press conference.... Read More

January 26, 2022
by Dan McCue
Majority of Cities Felt Financial Wallop Within Weeks of COVID’s Arrival

CHICAGO — Despite an almost immediate infusion of emergency federal funding, the majority of America’s largest cities saw a sharp... Read More

CHICAGO — Despite an almost immediate infusion of emergency federal funding, the majority of America’s largest cities saw a sharp and lasting decline in their fiscal well-being when the coronavirus reared its ugly head, a new report says. Published by Truth in Accounting, a think tank... Read More

Biden Chooses Three for Fed Board, Including First Black Woman

WASHINGTON (AP) — President Joe Biden will nominate three people for the Federal Reserve's Board of Governors, including Sarah Bloom... Read More

WASHINGTON (AP) — President Joe Biden will nominate three people for the Federal Reserve's Board of Governors, including Sarah Bloom Raskin, a former Fed and Treasury official, for the top regulatory slot and Lisa Cook, who would be the first Black woman to serve on the... Read More

November 19, 2021
by TWN
Private Equity Backs Thousands of Small Businesses Across America

WASHINGTON — Sunshine Beverages was a good idea looking to get its grow on. Founded by artisanal entrepreneurs Keith Vest... Read More

WASHINGTON — Sunshine Beverages was a good idea looking to get its grow on. Founded by artisanal entrepreneurs Keith Vest and Joe Parrish in 2013, the energy drink company was the offshoot of Vest’s forward-thinking ad agency, The Variable. Coming from a background of “helping clients... Read More

News From The Well