Rep. Ritchie Torres calls for probe into futures trades placed ahead March pause on Iran hostilities

Democratic Congressman Ritchie Torres of New York called on federal regulators on Wednesday, May 29, 2024, to investigate potentially massive insider trading in oil and equity futures markets that occurred minutes before former President Donald Trump announced a five-day pause in planned attacks on Iran's energy infrastructure in March. In a letter to the chairs of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), Torres cited reports of more than $500 million in suspicious trades placed just before Trump's market-moving announcement on his Truth Social platform, arguing the timing suggests traders had advance, non-public knowledge of the geopolitical decision. The call for a probe centers on a flurry of highly specific trading activity in the roughly 15 minutes before Trump's announcement. According to reports from Reuters and The New Yorker, there was an abnormal surge in futures volume predicting a drop in oil prices and a rise in equity markets—a logical move given that a de-escalation of hostilities would typically lower oil price premiums and boost market sentiment. Torres, in an interview, framed the trades as statistically impossible without insider information, asking, 'What kind of trader would make a massive trade at 6:49 a.m., 15 minutes before a market-moving presidential announcement with billions of dollars at stake and without a hedge?' This incident marks the second time in recent months that Torres, a member of the House Financial Services Committee, has raised alarms about potential insider trading linked to Trump administration actions. In January, he introduced legislation to ban federal officials from trading on event contracts based on non-public government information, following a well-timed bet on the prediction market platform Polymarket related to Venezuela that netted a $400,000 payout. The broader context includes growing concern among Congressional Democrats about the integrity of financial markets and prediction platforms in the face of potential political insider trading, with another group of lawmakers separately questioning the CFTC's oversight of offshore prediction markets just this week.