President Donald Trump has expressed strong condemnation of the alleged insider trading case involving his teleprompter operator, calling the situation 'deeply unfortunate and frankly a disgrace' according to White House Press Secretary Karoline Leavitt. Speaking Thursday, Leavitt confirmed that Trump is aware of reports regarding the betting scandal and has personally made the decision to place the operator on unpaid administrative leave while cooperating with the CFTC investigation. The president's response comes as the Commodity Futures Trading Commission (CFTC) continues its federal investigation into the case, with Leavitt emphasizing that there are very strict ethical guidelines at the White House that explicitly state not to engage in this type of activity, and noting that there has been a plan in place to prevent such violations but this individual unfortunately violated the plan and therefore he's paying the consequences for it.
Federal investigators with the CFTC found that Gabriel Perez, who has worked for the president since 2016, made tens of thousands of dollars by placing bets on more than a dozen Trump speeches over a three-month period, including the State of the Union address in February, a December primetime address, a January speech at the World Economic Forum in Davos, Switzerland, and Trump's remarks in March during a Medal of Honor ceremony, according to sources familiar with the matter. Kalshi's surveillance systems detected unusual betting patterns on 'mention' markets involving the president that did not follow typical behavior, and when investigators examined the accounts, they saw that Perez was a federal employee. The sources indicate that Perez made more than $100,000 in profits from the trades in question, with Kalshi having frozen approximately $90,000 of Perez's profits and banned him from betting on the platform. The company's lead lawyer, Bobby DeNault, confirmed that 'our surveillance team promptly flagged and referred these trades to the CFTC, and we are cooperating and assisting regulators.'
Records show that Perez was paid $175,000 annually as a deputy assistant to the president. Kalshi has frozen approximately $90,000 of Perez's profits and banned him from betting on the platform. White House Press Secretary Karoline Leavitt called the actions 'a disgrace' and confirmed that Perez is currently on unpaid administrative leave while cooperating with the CFTC. The investigation represents the first known instance of officials investigating suspected insider trading on a prediction market from inside the White House. According to sources familiar with the investigation, Perez sat for an interview with regulators and acknowledged some of the trades, with the CFTC expressing willingness to settle with terms requiring Perez to give back his profits and refrain from making similar trades. Federal prosecutors, however, declined to open a criminal investigation into the betting activity, with the CFTC's review remaining focused on whether Perez used nonpublic information while trading event contracts on the regulated prediction market.
Leavitt emphasized that there are very strict ethical guidelines at the White House that explicitly state not to engage in this type of activity, with the White House counsel's office making this clear to all government employees who work on behalf of the president. The case highlights growing concerns about insider trading in prediction markets, with Kalshi traders already wagering more than $800,000 on Thursday ahead of Trump's address to the nation. In March, White House staff received a memo warning against using non-public government information to place bets on prediction market platforms, stating it is a criminal offense for anyone inside the White House to 'buy' or 'sell' on these sites. The Department of Justice recently brought the two first cases of insider trading on prediction markets, involving a special forces soldier and a Google employee who allegedly bet on user searches using internal company data. The investigation has emerged as political statements become a paid source of market data, with Trump Media & Technology Group introducing the Truth API, a licensed service that will send real-time Truth Social posts from high-ranking accounts to financial firms.
