The Commodity Futures Trading Commission (CFTC) has imposed a fine of approximately $35,000 on former U.S. Representative George Santos for manipulating a prediction market related to his attendance at the 2026 State of the Union address. The regulator found that Santos made misleading public statements regarding his plans to attend President Trump's speech while trading contracts that could be influenced by his actions.
As part of a settlement announced on Friday, Santos is required to return $17,569.98 in illicit trading profits and pay a civil penalty of $17,500. Additionally, he has accepted a three-year ban from trading on markets regulated by the CFTC. Santos neither admitted nor denied the findings of the agency.
This settlement brings to a close a CFTC investigation that was initiated after Kalshi, the prediction market platform, flagged suspicious trading patterns in February.
According to the settlement details, Santos engaged in trading contracts on Kalshi that questioned whether he would attend President Trump's State of the Union address on February 24, a situation he could directly affect. Between February 12 and 25, he placed bets on both sides—'Yes' and 'No'—while making various public statements on social media about his attendance.
On February 22, Santos had accumulated 30,874 'Yes' contracts and asked his followers on social media for advice on his attire for the event. Following this, the price of 'Yes' contracts surged from $0.15 to $0.70. Later, he sold his contracts for a profit of $3,448.43.
However, after his flight to Washington, D.C. was canceled, Santos failed to inform the market about this cancellation or his exit from the 'Yes' position. Instead, he made a train reservation and suggested that travel disruptions might hinder lawmakers from attending, which led to a decrease in the price of 'Yes' contracts from $0.63 to $0.28.
On the day of the State of the Union, Santos claimed he was watching the speech from an airport TV, which caused a sharp decline in the 'Yes' contract prices, allowing him to gain $14,390 from his 'No' position. By this time, both his flight and train reservations had been canceled, and he had not arranged for alternative transportation. The CFTC concluded that Santos gained a total of $17,569.98 from these actions and noted his cooperation with the investigation.
In the aftermath of the settlement, Santos expressed his frustration with Kalshi, labeling it a gambling site and calling for regulatory oversight of prediction markets as gambling platforms. He supported New York Attorney General Letitia James' lawsuit against Kalshi and advocated for all states to regulate the platform as a gambling entity.