By Douglas Gillison, Saqib Iqbal Ahmed and Anirban Sen
WASHINGTON/NEW YORK, March 29 (Reuters) - Well-timed trades ahead of U.S. President Donald Trump's major policy surprises during his second term have potentially led to millions of dollars in profits for unknown traders, leading some legal experts to say they should be investigated to protect fair markets and ascertain whether information is leaking.
A Reuters review of trading ahead of major Trump administration decisions on tariffs, Venezuela
and Iran that led to significant market moves showed at least four instances where the legal experts said it appeared investors knew what would happen shortly before it did. The trades occurred on different types of markets and assets – options, commodities futures and predictions.
Given their timing and size, the trades warrant scrutiny to ascertain if they were based on inside government information, said the experts, who include a former enforcement director for the Commodity Futures Trading Commission and three academics who have studied insider trading.
"It looks deeply suspicious," said Andrew Verstein, an expert in insider trading at UCLA School of Law, adding that while the examples are limited in number, they show patterns you "would expect to see if there were informed trading by government officials and their friends."
Aitan Goelman, a former CFTC enforcement director and former federal prosecutor, said such trading would normally draw scrutiny, although he added that insider trading law for commodities markets is complex and still relatively uncharted.
The exchanges, CFTC and DOJ would typically find such trades "anomalous and interesting," Goelman said.
White House spokesman Kush Desai said government ethics guidelines bar federal employees from profiting off nonpublic information. "Any implication that Administration officials are engaged in such activity without evidence is baseless and irresponsible," he said in an emailed statement.
A CFTC spokesperson said the agency was in constant communication with exchanges "over trades that raise red flags" and that it conducts its own surveillance but did not say whether it had opened an investigation into the wagers.
The Securities and Exchange Commission declined to comment, while the Justice Department did not respond to a request for comment.
To be sure, some traders may have gotten very lucky or spotted signs of impending action the rest of the market missed, especially with Wall Street firms increasingly leaning on ex-military and national security advisers. Some trades may have been hedges for exposures taking the other side of the bet, which is common in macro-driven commodities portfolios.
ENFORCEMENT RECORD IS PATCHY
Trading with material and nonpublic information is typically considered illegal if the person has a duty not to, such as through an employment or confidentiality requirement. But the enforcement record is patchy across different assets and exchange venues.
While insider trading has been banned for over a decade in commodities and derivatives markets, for example, there is little precedent for bringing such cases in those markets, according to legal experts. Oversight of prediction markets, where some of the bets were made, is in flux.
Top SEC officials have said they intend to focus on more bread-and-butter fraud in securities markets, such as insider trading, yet many lawyers, investors and other observers say regulators have taken a softer enforcement stance during Trump’s second administration.
Steve Sosnick, chief strategist at Interactive Brokers, said the trades in question involved a patchwork of regulators like the SEC and CFTC and prediction markets, where the legal basis is murky. "If this was a single actor or a set of cooperating actors, it would require a high level of coordination between a diverse and dedicated group of regulators to get to the root of the issue," Sosnick said. "We have seen no evidence that this is occurring."
Sosnick added that the recent resignation of the SEC’s enforcement chief amid reports of frustrations made it “hard to imagine this becoming a high priority among regulators.”
WELL-TIMED TRADES
The Reuters review found four prominent instances where trades stood out for their timeliness. In April 2025, options traders made millions in late-breaking bets in the minutes before Trump announced a pause on his blanket “Liberation Day” tariffs, sparking a 9.5% jump in the S&P 500.
In January, an unknown Polymarket punter took in more than $400,000 after betting on the ouster of Venezuelan President Nicolas Maduro that month. The anonymous account was created the previous month, and placed more than $30,000 in bets that would pay off if the U.S. invaded Venezuela by January 31.
Bets placed on prediction markets like Polymarket and Kalshi ahead of the February 28 killing of Iranian Supreme Leader Ayatollah Ali Khamenei sparked fresh insider trading and ethics concerns. Analytics firm Bubblemaps identified six accounts that made a combined $1.2 million profit from Polymarket bets that were funded in the hours immediately before the U.S.-Israeli attacks that killed Khamenei.
This week, unidentified traders made a $500 million oil bet minutes before Trump sent crude plunging by announcing he was delaying an assault on Iranian energy assets. The bets were placed on the New York Mercantile Exchange, which is owned by CME Group.
A CME spokesperson declined to comment on the oil futures trades or whether the exchange operator was reviewing the trades.
Earlier in March, both Kalshi and Polymarket introduced new rules to crack down on potential insider trading on their prediction market platforms. A Kalshi spokeswoman said it will continue to "enforce as necessary and iterate on our existing technologies and partnerships," adding that bets of the magnitude of the oil futures transactions on March 23 would have been flagged if they had been placed on Kalshi's platform.
In an interview, Polymarket's chief legal officer, Neal Kumar, said Polymarket monitors and tracks all transactions that go through its U.S. platform in real time, and that the company has a set of controls that can quickly crack down on suspicious trading activity.
Some of the experts said the sheer size and binary nature of some of the bets raised the possibility that people may have had advance knowledge. Monday's $500 million oil market trade, for example, indicates extreme conviction as well as deep pockets, some of the experts said.
"When you're dealing with bets on unique events and things like that, those do raise a lot more suspicion that somebody has some specific inside information," said David Rosenfeld, former co-head of enforcement at the SEC's New York office.
(Reporting by Douglas Gillison in Washington and Saqib Iqbal Ahmed, Anirban Sen and Chris Prentice in New York; Editing by Michelle Price, Paritosh Bansal and Matthew Lewis)
