Former Rep. George Santos (R-NY) settled an “unlawful trading” investigation Friday into bets he placed on Kalshi related to whether he would appear at President Trump’s State of the Union address.
The convicted fraudster was hit with a three-year trading ban and agreed to pay $35,000 in fines and profits made off the wagers, the Commodity Futures Trading Commission (CFTC) said of the settlement.
“Kalshi caught George Santos. Now he’s paying an expensive price,” Robert Denault, the prediction market company’s head of enforcement, wrote on X.
“Pro tip for catching fraudsters: it’s often the usual suspects,” Denault added.
The CFTC found that Santos engaged in “manipulative activity” when he made wagers on a Kalshi market in February that asked users to predict, “Who will attend the State of the Union?”
The one-time New York lawmaker and New Jersey prison inmate allegedly placed a bet on Kalshi that he wouldn’t attend Trump’s address to Congress after announcing on X the day before that he would “be there…in the gallery.”
“While buying and selling positions in this market, Santos posted on social media about his plans to attend or not attend the [State of the Union],” according to the CFTC. “In his social media posts, Santos made a series of material misrepresentations and omissions about whether he would attend the SOTU.
“After these posts, the SOTU contract prices moved in a direction that was favorable to Santos’ positions which allowed him to make over $17,500.”
Joseph Murray, the former congressman’s lawyer, claims Santos had every intention of attending Trump’s speech but was thwarted by weather-related travel delays.
“He realized that he would not be able to safely attend the address and then logically adopted a no position,” Murray said in a statement, noting this was the first time Santos had ever wagered on a prediction market.
“Mr. Santos concealed neither his intention to attend, nor his change of plans to not attend the SOTU, from anyone,” Murray continued. “There was absolutely no intent to deceive any person, nor intent to manipulate any market.”
The lawyer said Santos agreed to settle “to put this matter behind him.”
“Critically, and consistent with how these regulatory matters are commonly resolved, Mr. Santos has settled without admitting any of the Commission’s allegations, findings, or conclusions,” Murray added, noting that the settlement should not be “mistaken for an admission of any wrongdoing, because it is not one.”
