The US Commodity Futures Trading Commission (CFTC) has fined George Santos $35,000 for manipulating prediction market trades on Kalshi regarding his 2026 State of the Union attendance. According to the latest CFTC order released on July 31, Santos must return $17,569.98 in trading gains, pay a $17,500 civil monetary penalty, comply with a cease-and-desist order, and stay away from trading on any CFTC-registered entity for three years. The CFTC concluded that Santos made misleading public statements and omitted material information that influenced market prices for his own financial benefit, pursuing the matter under anti-manipulation provisions rather than conventional insider trading charges.
Santos opened a Kalshi account on February 11 with approximately $7,000, trading only one contract asking whether he would attend President Trump's State of the Union address. Trading records show he initially accumulated 30,874 'Yes' contracts worth $6,695.94 between February 12 and February 22, profiting $3,448.43 before withdrawing $10,146.07 through a newly created Venmo account. When his flight and train were canceled, Santos posted on X asking followers about suit choices, causing the market price for 'Yes' contracts to climb from $0.15 to $0.70. He then posted a video on February 23 stating he would attend from the House gallery, but within 40 minutes began buying 'No' contracts worth $8,650.66 that would pay out if he didn't attend. The CFTC found that Santos' train was canceled about an hour after he started building his 'No' position, and he exited both positions on February 25 with a reported profit of $14,390.57.
Beyond the financial penalties, Santos faces a three-year trading ban and must return the winnings he received. According to Axios, his lawyer Joseph W. Murray stated that "Mr. Santos has settled without admitting any of the Commission's allegations, findings, or conclusions." Murray denied that Santos intended to mislead traders or manipulate the prediction market, saying his client chose to resolve the matter through settlement rather than continue with expensive litigation. The CFTC order states that Santos' public statements and omissions occurred while he actively traded positions tied to the same event, allowing him to benefit from price movements in both directions. This is not Santos's first regulatory problem, as Congress expelled him in 2023, and Trump commuted his fraud sentence last year.
Kalshi detected the suspicious trading activity through its surveillance systems and froze Santos' account, referring the matter to federal regulators. As reported by Axios, Kalshi CEO Tarek Mansour described how quickly the exchange identified the activity: "within seconds it was flagged by our system. We opened investigations and within minutes we had like a hundred whistleblower complaints." The platform plans to pursue its own enforcement action for violations of exchange rules and may reimburse affected traders if it successfully recovers funds from Santos. Kalshi has also taken enforcement action against other individuals, including three congressional candidates who bet on their own races and a White House teleprompter operator who lost his job after winning over $100,000 betting on Trump's speeches. The timing coincides with New York suing the company on the same day, with the state calling it illegal gambling and seeking up to $36 billion.
