facebook linkedin twitter

Democrats Seek Insider Trading Probe After ‘Trump Chaos’ Article

October 22, 2019by Ben Bain and Matt Robinson
U.S. Rep. Kathleen Rice (D-NY) speaks to the press at the Lower Manhattan Security Initiative Command Center on Aug. 17, 2016 in New York City, N.Y. Rice and Rep. Ted Lieu requested a federal investigation last week into the timing around sales of e-mini futures contracts related to Trump. (Albin Lohr-Jones/Pacific Press/Zuma Press/TNS)

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.

Finance

October 19, 2021
by Dan McCue
Administration Scaling Back Plan to Deepen IRS Scrutiny Into Bank Accounts

WASHINGTON - The Biden administration is reversing course on a proposal that would have required banks to flag private accounts... Read More

WASHINGTON - The Biden administration is reversing course on a proposal that would have required banks to flag private accounts to the Internal Revenue Service when an individual deposit or withdrawal exceeded $600. A revised plan, expected to be announced by Senate Finance Chair Ron Wyden,... Read More

October 12, 2021
by Dan McCue
IMF Downgrades Global Growth Outlook on Supply Chain Woes, Uncertainty

WASHINGTON -- The International Monetary Fund on Tuesday downgraded its estimate for global gross domestic product growth this year, citing... Read More

WASHINGTON -- The International Monetary Fund on Tuesday downgraded its estimate for global gross domestic product growth this year, citing supply chain concerns and uncertainties related to the pandemic. However, the global financial institution suggests growth should rebound next year. The IMF publishes its World Economic... Read More

October 6, 2021
by Victoria Turner
U.S. Chamber Study Finds Company Buybacks Benefit All Shareholders

WASHINGTON -- When a company buys back its own shares to reduce the amount of available stock in the open... Read More

WASHINGTON -- When a company buys back its own shares to reduce the amount of available stock in the open market, it benefits investors and decreases market volatility, freeing up capital for companies to better allocate it, according to a new U.S. Chamber of Commerce study. ... Read More

October 5, 2021
by Reece Nations
Biden Administration Lays Out Consequences of Debt Default

WASHINGTON -- President Joe Biden detailed on Monday the ramifications of failing to raise the United States government’s debt limit... Read More

WASHINGTON -- President Joe Biden detailed on Monday the ramifications of failing to raise the United States government’s debt limit while condemning Republicans in Congress for their role in the procedural delay. Congress has until Oct. 18 to raise the debt limit or else run the... Read More

August 30, 2021
by Dan McCue
SEC Seeks Info on Digital Engagement by Investment Advisors, Brokers

WASHINGTON - The Securities and Exchange Commission is seeking information from the public and industry professionals on the digital engagement... Read More

WASHINGTON - The Securities and Exchange Commission is seeking information from the public and industry professionals on the digital engagement practices of investment advisors and brokers. These tools include behavioral prompts, differential marketing, game-like features (also known as gamification) and other design elements used to engage... Read More

August 19, 2021
by Dan McCue
Ex-Netflix Employees Accused of $3.1 Million Insider Trading Scheme

WASHINGTON -- Three former Netflix software engineers and two close associates have been charged with generating over $3 million in... Read More

WASHINGTON -- Three former Netflix software engineers and two close associates have been charged with generating over $3 million in profits by trading on confidential information about Netflix's subscriber growth, the Securities and Exchange Commission announced Wednesday. According to a complaint filed in federal court in... Read More

News From The Well
scroll top