Are Trump and his ilk manipulating the markets for personal gain? Investigative business reporter William Cohan lays out the evidence
Donald Trump has been impeached by the House of Representatives for abuse of power and obstructing a congressional investigation into his attempt to blackmail a foreign country into aiding him in the 2020 presidential election. He is now the third president in American history to have earned that ignominious distinction.
Trump will not be convicted by the Republicans in the Senate for his crimes.
The public evidence is damning. There is no evidence that could possibly exonerate him. Trump is publicly bragging about committing crimes against the Constitution and the American people. The Republican Party and its propaganda news media have decided to ignore reality and fully immerse themselves in TrumpWorld. They have pledged total loyalty to him and no evidence will move them. The Republicans and their news media and public are authoritarian lemmings.
Donald Trump is America's first mercenary president. He is obviously and unapologetically corrupt. Like other authoritarians, Trump has no conception of the public good or the public interest. Power and money are his only goals.
Why would he (and his family and inner circle) stop at "only" using his properties, name and other forms of influence peddling to make money from being president of the United States?
In a series of articles for Vanity Fair, investigative reporter and author William Cohan has asserted that Donald Trump and his inner circle appear to be manipulating the stock market for their own personal financial gain. Cohan believes this likely or possible insider trading may involve hundreds of millions of dollars, perhaps even billions.
Cohan is a New York Times bestselling author of several books about finance and Wall Street, including "Money and Power: How Goldman Sachs Came to Rule the World" and "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street." His most recent book is "Why Wall Street Matters."
In this conversation, Cohan shares his evidence connecting high-profile events such as Trump's order to assassinate Iranian Gen. Qassem Soleimani with the purchase of defense industry stocks and futures contracts — hours before the military action took place. He also explains how Trump's deregulation of oversight and other protections would enable such a scheme, and identifies the various people in Trump's orbit who could facilitate insider trading.
Cohan is a special correspondent at Vanity Fair and a columnist for the New York Times. His writing has also been featured in The Financial Times, The Atlantic, The Nation, Bloomberg BusinessWeek, Fortune and Politico.
As usual, this transcript has been edited for length and clarity. You can also listen to my full conversation with William Cohan through the player embedded below.
What do we know about Trump's character and apparent propensity for corruption?
Trump talks like a thug. He owned casinos in Atlantic City. He is a real estate guy working in Manhattan, Queens and Brooklyn. But Trump is not smart enough to be a mob boss. He's just not clever enough.
He's never had anybody tell him that he couldn't do something. So in one sense, Trump is liberated. He can conjure up something and there is nobody telling him he cannot do it. He doesn't have shareholders. He doesn't have a board of directors — and that's the way he behaves as president. No accountability. Now Trump is finding out that it's not quite as easy as he thought, which is why he got himself impeached. He probably will slither through that in the end. Yet he just takes an attitude that can do whatever he wants. When Trump said he could shoot someone on Fifth Avenue and get away with it — he could probably get away with it at this point. He believes it.
Donald Trump has no conception of the public interest or the public good. So why wouldn't he run the White House and the presidency in such a way as to get more money by all available means?
That is exactly what is happening now. I've written three pieces for Vanity Fair about the trading and the E-mini market in the Chicago Mercantile Exchange. There was little response to the first one. In response to the second piece, the critics went ballistic. They tried to characterize me as some type of lunatic. The third piece has also barely registered. It is so clear that people are trading on information that they know will move the market, and it is clear to me that they are getting that information from the White House and Trump and his cabal.
Whether Trump and the cabal are directly profiting from it. I don't know. Moreover, I don't know how we in the public will ever know. Donald Trump has been a con man his entire life. He conned people in the real estate business. He conned people in the casino business, costing creditors of both of those businesses billions of dollars in losses. Trump destroyed billions of dollars in shareholder value. And then Trump conned the American people into electing him president of the United States.
Why do you think your story has not captured the 24/7 news cycle? It seems tailor-made: It involves Trump, his regime, money and potential illegal behavior. Moreover, Trump has been impeached. The timing could not be better for this story.
Nobody did anything with my reporting in July. In October, Stephanie Ruhle and MSNBC had me on. Congressman Ted Lieu also mentioned these questions. There were other congressmen calling for investigations by the Securities and Exchange Commission, the FBI and the Commodity Futures Trading Commission. There were also U.S. senators calling for investigations. Elizabeth Warren has called for an investigation into whether Trump gave information at Mar-a-Lago to his supporters, which then allowed them to buy defense stocks prior to his assassinating Soleimani. But if you are expecting Trump's SEC to ratify my reporting through a proper investigation, think again.
Do you think that the Chicago Mercantile Exchange is going to say, "Yes, there are people trading inside" on quasi-inside information, or what should be inside information? To make such an admission would mean it looks like trading on the Chicago Mercantile Exchange is rigged. Are you kidding me? There's no way they're going to admit to that. Everything is so corrupt now. There is no integrity, even when there is prima facie evidence that people were making hundreds of millions of dollars trading on information that others do not have. Whether it's technically "insider trading" or not is difficult to discern, because of course they are not getting corporate information.
Whoever is doing this is getting the stock market moving by using national security information, which is perhaps even better than getting corporate information. So if you are a person who knows that Donald Trump is going to assassinate Soleimani, you can be pretty sure that the markets are going to react negatively to that event and defense stocks are then going to go up. It's not a hard trade to put on, but to actually ratify that fact and admit to such a thing is not going to happen in TrumpWorld.
I am left wondering: Why hasn't the New York Times or the Washington Post picked this up?
I've found that other media outlets were quite anxious about my reporting too. CNBC had me on for a long segment. Bloomberg couldn't wait to attack the whole idea of people getting tips from inside or around the Trump administration, because Bloomberg's whole business model depends on the public thinking that the markets are fair and open and not rigged. Bloomberg and others with the same commitment must do everything they can to bat down this idea that somehow people are getting inside information that isn't available to everybody else.
How did your reporting at Vanity Fair about possible insider trading and other questionable behavior come together?
It is pretty simple. The people whose business is to trade these E-mini's —these future contracts that are tied to the S&P 500 stock index — do this professionally. They have been doing this for 10, 20, 30 and in some instances 40 years. They see these anomalies in the trading. Trading has a certain pattern and a certain rhythm. It's akin to the news business where if you're a journalist on a beat and you've been working it long enough, you know when there is something anomalous. Well if you're a trader who's trading E-mini's and that's what you do all day and you see something anomalous and then you can trace it back to news events, well then you can't help but wonder what's going on and why people are making what appears to be hundreds of millions of dollars.
You make $170 million in a day, then you're not going to wait around and see if that's going to be $200 million in two days. You're going to take your money and go. The traders were seeing these things and they reached out to me. I reported what the traders were telling me, and I had it well-documented. They can always have other explanations for this: Maybe this group of traders got incredibly lucky? Maybe they just called it right? They called it right in July, then called it right in October, and then called it right with the killing of Soleimani. Maybe some traders just got totally lucky all those times. But that's not really the way it works.
We know that insider trading is rampant, especially in times like this where regulators are basically asleep at their desks, because the Trump administration has told them to be asleep at their desks. That is what big business wants — as little regulation as possible. Trump likes this idea of rewarding people who are loyal to him. He also likes padding his own bank account. Who knows whether any of the money from the trading gets kicked back to him? We'll never know. Literally, Donald Trump is the man who doesn't release his taxes. Trump also does not divest his own businesses. He is incredibly and embarrassingly corrupt. The question of these trades is potentially just one more symptom of that corruption.
How do we separate those people who are just careful observers of current affairs and doing nothing illegal or untoward from those who may be getting inside tips about what stocks to trade or investments to make?
Here's the problem. I don't know who's behind these trades. The Chicago Mercantile Exchange knows who's behind these trades. The Commodity Futures Trading Commission can find out who's behind these trades. The SEC can find out who's behind these trades. The FBI can probably find out who behind these trades.
So they're basically saying it's just one big coincidence and people are just getting lucky and doing good smart trading. How are people like you and me, without those kinds of subpoena and regulatory powers, supposed to know what really happened? If the investigators say there's nothing to it, then what are we and the public supposed to do at that point? There is nothing we can do.
Ultimately, what I'm arguing in my reporting is that there are people who are professional traders who do this for a living, who do this day in and day out and who've been doing it during the Obama administration and the George W. Bush administration and, except for 9/11, didn't see any anomalous trading. Then Donald Trump comes along and it's one week after the next.
There's pushing Jerome Powell into lowering interest rates, which obviously Trump knows, if he can get them to do it, will increase the stock market. And then there's assassinating Soleimani. Which Trump obviously knows is going to move the market. President Trump does not seem to care. The commerce secretary doesn't seem to care. The Treasury secretary doesn't seem to care. These people are basically immoral. Donald Trump has selected and surrounded himself with people who are completely immoral and will do whatever it is he asks.
Is Mar-a-Lago a nexus for Trump's apparent influence peddling and corruption?
Anywhere Trump shows up is a nexus for his influence peddling and corruption. It could be his golf courses or Mar-a-Lago or somewhere else. Gift-giving is a form of currency, influence-buying. Certainly Trump knows that he can buy loyalty from people. And what's a better way to buy loyalty than if you're president of United States and you know you're going to assassinate the No. 2 guy in Iran and that it's going to move markets.
On Jan. 2, the markets were up big. Soleimani was assassinated at one in the morning, Baghdad time, after the markets here had closed. There was some night trading, which was obviously going to make the markets go down the next day. Killing Gen. Soleimani was going to make the Middle East much more unstable. And what better way to reward your buddies — who were already your buddies, because they're at Mar-a-Lago, to begin with, on New Year's Eve — than with this little gift? It's not hard to figure out what's going on.
How would one send those signals? How does insider trading work?
Who are the people who know what is going to happen? Who knows about the trade docs? Steve Mnuchin, Robert Lighthizer, Wilbur Ross. Larry Kudlow, Donald Trump, Trump's kids, Trump's son-in-law. These people who do have knowledge of certain events are either giving gifts to friends or trying to continue to buy loyalty. What I think is more likely is that there are surrogate traders who are making these trades with inside information. They make the money and then stash it in some sort of account to be gotten back to after they leave office. But again, I don't know. The people who would know are not cooperating. The head of the Chicago Mercantile Exchange said that my article in October should have been written in crayon because it was so childlike.
To reiterate: The people who were supposed to be watching and regulating are somehow complicit, looking away, indifferent, etc.?
That is the only way this could work. They were all appointed by Trump. They all owe everything to Trump. Steven Mnuchin was a failed Goldman partner and a failed private equity guy who's been made Treasury secretary. Mnuchin was plucked from nowhere because he was one of the only people who would raise money for him. This is the reward that he got. Wilbur Ross' relationship with Donald Trump goes back to restructuring casino credit debt during the 1990s. Wilbur Ross enabled Donald Trump to continue getting paid by his casinos even though he'd sent them into bankruptcy because he represented creditors and that was the deal they cut. These relationships go back, in some cases, a long time and these people truly admire Donald Trump.
What do we know about Donald Trump and Iran, in terms of what you detailed in the Vanity Fair article about potential war profiteering?
He does know how to move markets. And he did know that this was going to be a market-moving event. Either he wanted to profit himself from it or he wanted his friends to profit from it or his family to profit from it. He's a guy who lies about his net worth. We know he lies about everything.
All one has to do to make a solid bet about a future conflict is to be a careful reader of the news, do research, consult with experts and the like. Therefore, the competitive advantage with insider trading is just a function of time, some insight into future events. Correct?
If it were happening, that is how it would work. For example, Mnuchin doesn't even have to say what's happening. He could just say to a contact, buy or sell 10,000 E-mini contracts. Do that every 10 minutes for the next hour and then the market falls and you've made $190 million and nobody's going to say anything. I was a banker for close to 20 years on Wall Street. I've seen this behavior with my own eyes. I've lived this behavior and now I've been writing about it for 16 years.
What is the culture like among those who deal in high finance with these amazingly large amounts of money? What values are rewarded? What does it feel like to make that much money in a day?
They think they're worth it. They think they deserve it. It's how they keep score. They're making all this money. In their minds they deserve to make all this money. Do you think Jeff Bezos thinks for a second that he doesn't deserve to be the world's richest man, worth $100 billion? There's no doubt in their minds that they are worth every penny that they're getting. There's no self-doubt. There's no introspection. Yes, there are some people who are obviously much more civic-minded and ecumenically minded and who are aware of the vast gulf between the rich and poor and income inequality in this country. But they are not so self-aware and troubled to the point of actually doing something about it. Wall Street is not monolithic, of course. There are people who are very moral and very ethical on Wall Street who would never do what I have been reporting about. But there's obviously a subset of people where that is just not true: If they can get an advantage, then they'll take it.
In a just world, what would happen as a result of your reporting?
I would get to the bottom of it. I would find out who's trading and where they're getting their information. I'm sure it goes right to the top. And that would be the end of Trump, because such behavior is clearly illegal. Although there are those who have made an argument which goes, "Well, that's not technically insider trading. It's not corporate information and the insider trading laws apply to corporations. And by the way, until recently, congresspeople could trade on inside information and it was not illegal."
You could imagine Attorney General Bill Barr making such a legal argument. They got Al Capone on tax evasion. Maybe Trump could get caught on stealing money from traders, the people on the other side of his trade. Because for every winner of $190 million, there are people who've lost $190 million. I bet those people are pissed.