Federal prosecutors are investigating former New York congressman George Santos for possible insider trading tied to his activity on the prediction market Kalshi, according to people familiar with the matter.
The inquiry centers on events around President Trump’s State of the Union address in February. Four months after his release from federal prison, Santos posted a video on social media saying he would be in the gallery for the speech. That post briefly pushed up the odds in a Kalshi market where traders had wagered millions on who would attend. Santos did not ultimately attend and posted a message during the address that he was watching from an airport television, a development that sent the market odds tumbling.
Three people with direct knowledge of his trades told reporters that Santos had already placed bets on Kalshi that he would not attend the State of the Union. They said he profited from those bets — in the tens of thousands of dollars — after his public statements influenced other traders’ positions. Kalshi detected the trades, froze the account and referred the matter to the Commodity Futures Trading Commission and the Department of Justice, those people said. Both agencies subsequently opened investigations.
Kalshi declined to comment and neither the CFTC nor the Justice Department responded to requests for comment. When asked by NPR about the probe, Santos said, “Well, that’s news to me,” and would not confirm whether he had an account. He added that he personally knows Kalshi co‑founder Luana Lopes Lara, calling her “a fellow Brazilian” and saying he would call her to check whether an investigation was underway. A person familiar with Kalshi’s inquiry told reporters Santos does not know Lara. Santos did not respond to follow up messages.
Kalshi has reportedly reached out to Santos to interview him as part of its review, but the company says he has not cooperated, according to a source familiar with the investigation.
Background on Santos
The alleged trading behavior comes after a highly public fall for the 37‑year‑old former Republican representative. Santos won election to Congress amid numerous fabrications about his education, background and personal history. After being sworn in, he was indicted in 2023 on 13 counts that included wire fraud, money laundering and stealing from donors; a judge sentenced him to more than seven years in prison. Santos served roughly four months after President Trump commuted his sentence in October.
Prediction markets in the spotlight
The Santos matter arrives as lawmakers and federal regulators pay close attention to prediction markets such as Kalshi and Polymarket, which let users wager on outcomes ranging from auction prices to geopolitical events. Officials have raised concerns that people with advance or private knowledge could manipulate those markets and defraud other bettors.
Recent enforcement actions underscore the risks regulators worry about: federal prosecutors charged a U.S. Army Special Forces soldier in April for allegedly using inside information to profit more than $400,000 on a Polymarket market about the capture of Venezuela’s leader. A Google employee was charged last week for allegedly using confidential company information to make more than $1 million betting on search trends, also on Polymarket.
Traders on forums such as Discord reacted angrily to the State of the Union episode, accusing Santos of deceiving Kalshi users. One participant wrote, after losing money betting that Santos would attend, “I want George Santos in Kalshi prison for 15 years!!!” Others used trading slang to describe feeling “rugpulled” when the market moved against them.
Santos remains a subject of attention on Kalshi even after his account was frozen. Last month, nearly $90,000 was wagered on a market about what words he would say in a Newsmax interview; he did use the word “rumor” but avoided saying “corruption.”
The investigations by Kalshi, the CFTC and the Justice Department are ongoing.
