Former US Representative George Santos has agreed to pay more than $35,000 to resolve allegations by the Commodity Futures Trading Commission (CFTC) that he engaged in manipulative trading on the prediction market platform Kalshi.
The case centered on event contracts concerning whether he would attend the 2026 State of the Union address.
According to the CFTC order announced on July 31, 2026, Santos must return $17,569.98 in profits from the trades and pay a civil monetary penalty of $17,500.
He also accepted a three-year ban on trading and agreed to cease and desist from further violations of the Commodity Exchange Act and related regulations.
Santos neither admitted nor denied the findings as part of the settlement.
The regulator determined that between February 12 and February 25, 2026, Santos traded contracts on Kalshi titled “Who will attend the State of the Union?” specifically focused on his own potential attendance.
Kalshi, a designated contract market regulated by the CFTC, allows users to buy and sell event contracts that function as swaps dependent on the occurrence or non-occurrence of specified future events.
Santos opened a Kalshi account on February 11, 2026, and concentrated his activity exclusively on the market regarding his attendance at the February 24 event.
He initially built a substantial “Yes” position, accumulating tens of thousands of contracts.
During this period, he made multiple public statements on the social media platform X about his plans.
For instance, while holding a “Yes” position, he posted asking followers whether he should wear a muted suit or a bedazzled one to the address.
Contract prices for the “Yes” position rose significantly afterward, and he exited the position at a profit.
Later statements referenced travel difficulties due to weather, potential cancellation of the event, and affirmations that he would still attend “in the gallery.” Prices moved in response to these posts.
He subsequently shifted to building a “No” position.
On the day of the State of the Union, after posting that watching the address from an airport television “was not part of the plan,” the value of the “Yes” contracts dropped sharply, benefiting his opposing holdings.
He closed the “No” position for a substantial gain.
The CFTC found that Santos made material misrepresentations and omissions in his social media activity about his attendance plans and travel status—such as not disclosing cancellations of plane and train tickets—while trading an event whose outcome he could influence.
The agency concluded that this conduct constituted the use of a manipulative or deceptive device in connection with a swap, in willful or reckless violation of the Commodity Exchange Act and Commission regulations.
It noted Santos’s cooperation, which helped resolve the matter promptly.Santos’s attorney, Joseph Murray, stated that his client settled to avoid prolonged litigation without admitting wrongdoing.
Murray asserted that Santos had genuine plans to attend, including booking travel that was disrupted by weather, and that he made no effort to conceal changes in plans or to deceive anyone or manipulate markets.
The lawyer emphasized that this was Santos’s first experience with a prediction market.Kalshi had flagged the activity and referred it to regulators.
The settlement underscores ongoing CFTC scrutiny of event contracts on prediction platforms, particularly where participants hold unique influence over the underlying outcomes.
Santos, a former Republican representing New York’s 3rd Congressional District who was expelled from the House in 2023, has faced prior legal challenges. This resolution marks another chapter in his post-congressional dealings with federal authorities.
