Former U.S. congressman George Santos made prediction market bets on whether he would attend the State of the Union address this year, drawing the ire of the U.S. Commodity and Futures Trading Commission (CFTC).
In a settlement with Santos, the CFTC ordered him to disgorge the US$17,570 that he made from trading an event contract on KalshiEX LLC between Feb. 12 and 25 on whether he would attend the speech or not.
“While buying and selling positions in this market, Santos posted on social media about his plans to attend or not attend,” the regulator said — and those posts included “a series of material misrepresentations and omissions” about whether he would be there or not, it noted.
By trading an event contract when he could determine the outcome of the underlying event, Santos violated derivatives rules, the CFTC order said — adding that making misleading public statements to benefit his trading position also violated the rules.
In addition to disgorging his illicit profits, the CFTC also imposed a three-year trading ban on Santos, issued a cease and desist order against him and ordered a civil penalty of US$17,500.