US probes suspicious oil trades made before Trump Iran pivots, source says
CFTC Chairman Michael Selig, in a speech prepared to be delivered to Congress on Thursday, said the agency would go after those who commit crimes, but there was nothing in the statement that referred to any specific investigation, and an agency spokesman declined to comment.
“I want to be very clear: to anyone who engages in fraud, manipulation or insider trading in any of our markets: we will find you and you will face the full force of the law,” Selig said in statements seen by Reuters.
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The CFTC investigation focused on the trading of oil futures contracts on platforms owned by CME Group and Intercontinental Exchange, and investigators examined at least two instances of oil trading on March 23 and April 7, the source said.
Well-timed trades may have generated millions of dollars in profits; This raises concerns among lawmakers and legal experts that decisions regarding war and diplomacy could create opportunities for abuse in volatile and opaque derivative markets.
Investors placed nearly $950 million in bets on oil prices just hours before the United States and Iran declared a ceasefire last week. There were similarly well-timed transactions in the oil market on March 23.
The data requested from exchanges includes the Tag 50 identities of the organizations behind the transactions.
“At CME Group, we vigorously monitor our markets and work closely with the CFTC to oversee trading activity,” a CME spokesperson said in a statement, adding that any review of market behavior must include all venues, including prediction markets that list relevant products with little or no visibility.
ICE declined to comment on the matter.
The White House warned its staff not to improperly use their positions to place bets on futures markets amid the ongoing war in Iran.
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The CFTC’s executive director said last month that the agency is aware of and “monitoring” speculation about insider trading in CFTC-regulated markets.
Democratic Sen. Elizabeth Warren of Massachusetts, a leading watchdog and critic of the CFTC, said in a statement that the agency’s investigation was a start and that regulators should do more to investigate insider trading by administration officials.
The White House did not immediately respond to a request for comment on Warren’s statement.
