This is why I am troubled by a pattern of trading widely reported in recent months. On several
occasions in the past year, large directional trades have been placed shortly before major
announcements by President Trump and proved extraordinarily profitable. Let me highlight two.
On March 23, roughly $580 million in crude oil futures were sold in a two-minute window, just
fifteen minutes before the President announced a halt to strikes on Iranian energy infrastructure,
which sent the value of those futures plummeting. And in January, a previously inactive
Polymarket account wagered on the capture of Venezuelan President Maduro days before a
covert military operation accomplished exactly that, turning $34,000 into over $400,000.
I cannot tell you today that these trades constitute insider trading. That requires tracing accounts,
identifying beneficial owners, and establishing access to material nonpublic information. It is
possible that the traders were just lucky, or that they had no ties the Administration. What I can
say is that these patterns exhibit the worrisome hallmarks investigators are trained to identify.
Whether anyone is actually investigating is a question this Committee should be asking.
That question leads directly to my second point. Suspicious trading does far more damage when
the public has no confidence anyone is investigating. Weak enforcement does not merely fail to
catch wrongdoers—it invites suspicion of everyone, raises trading costs, and drives capital
elsewhere.
I am therefore concerned about a sustained erosion of the SEC’s capacity. Its Fiscal Year 2025
Enforcement Results, released last week, celebrate the closure of over a thousand matters
without action. Whistleblower awards are down 90% and staffing down almost 20%. Meanwhile,
the Consolidated Audit Trail—the most comprehensive surveillance tool the SEC has ever had—
is being scaled back.
I take this last change personally. My own research uses SEC filings to detect insider trading that
enforcement has missed. In one study, my co-authors and I found insiders concealing sales of
overvalued stock worth more than $100 billion annually. That kind of research empowers
shareholders to hold directors and officers accountable.
But this is only possible when records exist. In research on insider trading around the collapse of
Enron and WorldCom, I found the SEC had destroyed documents I needed—shredded without
