Margaret Ryan, the top enforcement official at the Securities and Exchange Commission — the agency tasked with investigating insider trading and other illegal activities in financial markets — abruptly resigned last week, after just six months on the job.
Reportedly, Ryan wanted to be more aggressive in pursuing charges of fraud and other misconduct, including against Trump’s inner circle. But the SEC’s chairman, Paul Atkins, and other Republican appointees to the commission wouldn’t let her.
When Trump appointed Atkins chair of the SEC, he was co-chair of the Token Alliance, a cryptocurrency advocacy group, and he owned $6 million worth of holdings in crypto-related businesses.
During Atkins’s time at the SEC, the commission has dropped or settled numerous lawsuits with cryptocurrency companies and adopted a lax regulatory approach to fraud.
It’s also avoided politically sensitive cases — such as, let me hazard a guess, insider trading by Trump’s family and cronies.
Why do I mention insider trading by Trump’s family and cronies?
Because on Monday, March 23, at 7:05 a.m. ET, Trump posted on his Truth Social platform that Washington had held “VERY GOOD AND PRODUCTIVE CONVERSATIONS” with Tehran over a “COMPLETE AND TOTAL RESOLUTION” to hostilities.
Immediately, the stock market roared to life. The S&P 500 futures soared more than 2.5 percent before the opening bell. And oil futures (bets on the future prices of oil) plummeted, dropping 14 percent in a matter of minutes.
But something very peculiar happened 15 minutes before Trump’s post.
I apologize in advance for giving you a bunch of charts, but it’s important that you see exactly what happened at 6:50 Eastern Time Monday morning.
At 6:49 a.m. ET, traders placed 734 bets on crude oil contracts on the New York Mercantile Exchange. One minute later, at 6:50 a.m., that number had jumped to 2,168 — equivalent to about $170 million.
At the same time — 15 minutes before Trump’s announcement — West Texas Intermediate futures also saw a huge spike in trading activity.
The same pattern was seen in contracts for Brent crude, the other major oil benchmark. Between 6:48 a.m. and 6:50 a.m. ET, the volume of trades rose from 20 to more than 1,650. That’s about $150 million in contracts.
A similar spike in trades occurred between 6:49 a.m. and 6:50 a.m. ET in futures contracts for the Standard & Poor 500 stock index, the Euro Stoxx 50, and other stock markets.
At 6:50 AM ET, $1.5 billion in notional value of S&P 500 futures contracts were bought.
In other words, 15 minutes before Trump announced that the U.S. would postpone strikes against Iran’s energy infrastructure, the volume of stock market trades mysteriously spiked and the price of oil just as mysteriously plunged.
Yet at that time — 15 minutes before Trump’s announcement — there were no public indications that any serious talks had been taking place between the U.S. and Iran.
So this huge spike in stock market trades and drop in oil futures must have been made by someone, or some people, who had prior knowledge of Trump’s announcement.
This person or these people made a boatload of money off this inside information.
But who was the inside trader, or traders, who placed such huge bets on Trump doing exactly what he did?
Could it be, say, Jared Kushner, Trump’s son-in-law, who is one of the people representing the United States in negotiations with Iran, and is also operating a private-equity firm with over $6 billion in investments, heavily funded by Middle Eastern sovereign wealth funds, especially Saudi Arabia’s Public Investment Fund?
Or Steve Witkoff, who’s also representing the U.S. in these negotiations and who also has his own investment firm?
Or Howard Lutnick?
Or Melania?
Or all of them?
Who knows?
The Securities and Exchange Commission is in charge of policing against such insider trading. On the basis of the trading I mention above, ordinarily the SEC by now would have opened an investigation.
But so far, nothing.
This isn’t the first time spikes in betting have occurred just before Trump did something unexpected.
In January, wagers surged on Polymarket, a crypto-powered predictions platform, as bets were made on Venezuela’s president Nicolás Maduro being out of power by the end of the month. Hours later, he was seized by American forces. (One account made more than $436,000 from a $32,537 bet.)
Why should we worry about people with insider information profiting in the stock market, futures markets, or even crypto-powered predictions markets?
For one thing, it’s unfair. It hurts average investors while increasing the wealth of certain people who know, for example, what Trump is about to do (including Trump and members of his family).
For another, such rigging erodes public confidence in market fairness, which ultimately destroys markets. Put simply, if the public believes the market is rigged in favor of privileged individuals, they may withdraw their investments.
This is why the Securities and Exchange Commission is supposed to police the market against insider trading.
And why we should all be concerned that the top enforcement officer at the SEC abruptly resigned last week because the SEC’s chairman and other Republican appointees wouldn’t allow her to be more aggressive in pursuing charges of fraud and other misconduct against Trump’s inner circle.
And why what occurred Monday morning, 15 minutes before Trump’s public announcement, is so damned troubling.
Friends, there’s a word for this. It’s called corruption.
Robert Reich is a professor at Berkeley and was secretary of labor under Bill Clinton. You can find his writing at https://robertreich.substack.com/.
