Federal Regulators Fine Former Rep. George Santos $35,000 Over Prediction Market Trades
Former Representative George Santos has agreed to a $35,000 civil penalty and the surrender of profits after federal regulators announced Friday that he engaged in insider trading on the prediction market Kalshi. According to the Commodity Futures Trading Commission, Mr. Santos generated approximately $18,000 through manipulated trades over a two-week period in February by misleading bettors regarding his attendance at President Trump’s State of the Union address.
Social Media Campaign and Market Manipulation on Kalshi
Mr. Santos opened an account on Kalshi on Feb. 11 and subsequently wagered roughly $6,700 between Feb. 12 and Feb. 22 that he would attend the speech, while simultaneously using X to mislead his followers. By posting queries such as whether he should wear a “muted serious suit to the SOTU or a bedazzled one?”, he caused the market value regarding his attendance to surge before exiting his position on Feb. 23 with about $3,400 in profits.
Wager Against Attendance Prior to the Address
The day before the February address, Mr. Santos wagered thousands of dollars that he would not attend the speech while continuing to assure the public otherwise, stating in an online video that he would “be in the gallery.” The morning after the event, he secured profits exceeding $14,000. Kalshi’s spokeswoman noted that the platform investigated the trading activity and supplied the evidence necessary for the C.F.T.C. action.
Regulatory Scrutiny and Background on the Former Lawmaker
The settlement coincides with broader scrutiny of prediction markets and the C.F.T.C. regarding the policing of platform abuses, alongside a separate lawsuit filed Friday by the New York attorney general accusing Kalshi of operating against unregulated gambling laws. Mr. Santos, 38, was previously expelled from Congress and convicted of federal fraud charges in 2023 following extensive reports regarding his financial dealings and biography; he was sentenced to seven years and three months in prison in 2025 before being released after fewer than three months when President Trump commuted his sentence.
