US regulatory and investigative authorities are investigating whether former Republican congressman George Santos, son of Brazilians This figure, involved in a series of political and judicial controversies in recent years, used insider information to gain a financial advantage in a betting market linked to political events.
The case gained notoriety after suspicions arose that Santos had bet against his own attendance at President Donald Trump's traditional State of the Union address, held at the end of February, even after publicly announcing that he would attend the ceremony.
The investigation comes at a time of increasing scrutiny of so-called prediction markets, platforms that allow financial betting on political, economic, and social events and which have been experiencing strong growth in the United States.
The bet raised suspicions.
Shortly before Trump's speech, George Santos' participation became one of the most discussed topics among users of the Kalshi platform, which specializes in prediction markets. Bettors were trading contracts related to the guest list and the presence of political figures at the event.
Amid the speculation, Santos itself posted a video on social media to fuel the anticipation.
"I'll be in the audience," Santos teased in a video posted on X.
What caught the attention of the authorities, however, was the fact that the former congressman did not attend the speech. According to a person familiar with the case, who spoke to the newspaper on condition of anonymity. The New York TimesKalshi identified that Santos had bet against his own presence at the event.
Faced with suspicions of insider trading, the company decided to refer the case to the United States Department of Justice and the Commodity Futures Trading Commission (CFTC), the body responsible for overseeing forecast markets and certain financial instruments.
Financial regulator opens investigation.
According to another source heard by The New York TimesThe CFTC is already conducting a formal investigation into the case. There is no confirmation yet that the Department of Justice has opened its own investigation.
George Santos did not respond to requests for comment from the US press.
The investigation once again shines a spotlight on the workings of prediction markets, a rapidly growing sector that has become the target of debates about transparency, oversight, and potential conflicts of interest.
Kalshi, one of the leading companies in the sector, has ties to members of the political and business circle connected to President Donald Trump. Early last year, the company announced Donald Trump Jr., the president's eldest son, as a strategic advisor.
Pressure on oversight
The case arises amid questions about the CFTC's own role in overseeing this market.
A recently published investigation by The New York Times He pointed out that the regulatory agency has adopted a series of decisions favorable to prediction market companies during the current Trump administration.
The report also revealed that two career employees of the commission, who had questioned the handling of cases involving these platforms, were removed from their positions and subjected to internal investigations.
In an interview with the newspaper, CFTC Chairman Michael S. Selig stated that the agency intends to act rigorously in the face of any irregularities and promised to hold accountable those who violate industry rules.
A career marked by scandals.
The new investigation adds another chapter to George Santos' turbulent career.
Elected to represent the state of New York in the House of Representatives, Santos became the target of questioning after reports revealed inconsistencies and falsehoods in his biography.
In 2023, the former congressman was accused of fraud after journalistic investigations indicated that he had lied about aspects of his academic background, professional career, and assets.
Later, federal prosecutors accused him of presenting false information in official documents and of participating in schemes involving campaign funds and political donations.
The seriousness of the accusations led to his expulsion from the House of Representatives, a rare measure in the history of the U.S. Congress.
Later, Santos was sentenced to seven years in prison. However, He ended up leaving prison after President Donald Trump decided to commute his sentence..
A series of cases involving insider information.
The investigation involving George Santos is not an isolated incident.
In recent weeks, US authorities have opened further investigations related to the misuse of insider information in prediction markets.
Last month, the Department of Justice and the CFTC accused a Google employee of using inside information to place bets on internet search results.
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