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CFTC fines Santos
The Commodity Futures Trading Commission announced Friday that former congressman and current legend George Santos agreed to pay a $35,000 civil fine and to relinquish over $17,569 in profits after it said he manipulated a prediction market tied to whether he would attend President Donald Trump’s State of the Union in February.
“has been fined $35,000 for attempting to place bets on his own attendance of the State of the Union in February”
The CFTC said Santos posted on social media about his plans to attend or not attend the SOTU while buying and selling positions on the Kalshi platform, and that “After these posts, the SOTU contract prices moved in a direction that was favorable to Santos’ positions.”
The settlement also imposed a three-year trading ban on Santos from Kalshi, according to the CFTC announcement described by Mother Jones.
Santos’ lawyer Joseph Murray said in a statement that the settlement should not be mistaken for admission of wrongdoing, writing that Santos settled “without admitting any of the Commission’s allegations, findings, or conclusions.”
Posts, profits, ban
The case centered on Santos’ public statements about attending the speech, including his video posted to X the day before the address in which he said, “I’m going to be there for the State of Union in the gallery, guys.”
Benzinga reported that after a canceled flight prevented him from attending, he changed his position on the bet and earned more than $17,500, while the settlement required him to forfeit his winnings and pay a matching $17,500 fine.
Kalshi confirmed Friday that it flagged the trades for the CFTC, and Benzinga quoted Kalshi’s enforcement head Robert DeNault saying, “Kalshi will also pursue its own enforcement action for violating exchange rules.”
Santos’ attorney Joseph Murray argued that Santos had a “genuine intention” to attend, including booking a hotel and plane ticket before a winter storm scuttled the plans, and ABC7 New York quoted Murray saying, “There was absolutely no intent to deceive any person, nor intent to manipulate any market.”
Aftermath and precedent
The settlement came as regulators and platforms faced pressure over prediction-market integrity, with Axios describing the CFTC’s finding that Santos posted on social media about his plans to attend or not attend the SOTU while trading the event contracts.
““In his social media posts, Santos made a series of material misrepresentations and omissions about whether he would attend the SOTU.””
Axios quoted the CFTC statement that “In his social media posts, Santos made a series of material misrepresentations and omissions about whether he would attend the SOTU,” and said the agency also imposed a three-year trading ban.
Mother Jones added that Santos had been expelled from Congress in 2023 after being charged with a litany of offenses including identity theft and pilfering campaign funds, and that he was sentenced to prison for 87 months before Donald Trump commuted his sentence and he was released after 84 days.
The consequences extend beyond the settlement itself, as Kalshi said it would pursue its own enforcement action and work to reimburse affected traders if monetary penalties are recovered, while Santos continued posting about Kalshi on X and threatened to have it “legislated out of existence.”
