Although the pace of corruption surrounding the Trump administration can feel difficult to keep up with, there’s a new area of concern that has opened up thanks to a new Vanity Fair article. Their reporter William Cohan has outlined a series of stock trades that have occurred at the Chicago Mercantile Exchange in recent months and earned those behind them millions and in at least a couple of cases over $1 billion at a time directly thanks to market changes following political developments in the White House (and at least once overseas, in Hong Kong). Now, Democratic Reps. Ted Lieu (Calif.) and Kathleen Rice (N.Y.) want federal authorities to investigate the transactions, which in theory, they were supposed to already be doing.
The members of Congress write, to the FBI, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC):
‘While the… trades may be purely coincidental, their timing and scale raise serious suspicions about whether the traders received material nonpublic information that would affect the S&P and how they received such information. We urge you to swiftly investigate whether trading on insider information or any other fraudulent behavior occurred in relation to these trades.’
Vanity Fair‘s Cohan already tried to get in touch with some of those same federal authorities to see if he could get any answers, but to no avail. The SEC declined to comment, while the CFTC simply did not respond at all. Meanwhile, the Chicago Mercantile Exchange itself asserted that “the trades in question did not originate from a single source and they were of no concern.”
Despite what Cohan describes as an “indifferent shrug” from authorities, some, like Lieu and Rice, are concerned.
A longtime trader at the Mercantile Exchange told him:
‘There is definite hanky-panky going on, to the world’s financial markets’ detriment. This is abysmal.’
The transactions themselves are huge, and nowhere near something like small potatoes — at one point in June, about 40 percent of the day’s total volume of trading in a particular kind of stock was made up by a purchase of 420,000 shares of it. Very soon after — Trump was already in Japan at the time — Trump claimed that trade talks with China were “back on track” after weeks and months of stops and starts that have continued to this day. No matter any lasting volatility, the person or persons behind that massive June trade made about $1.8 billion when the market rallied following that Trump announcement.
Other example transactions include sales and purchases that have occurred right before an attack on Saudi oil facilities that some have blamed on the Iranian government, an announcement from China that they’d lift tariffs on some American goods, and the announcement of the withdrawal of a controversial extradition authorization bill in Hong Kong. Another massive stock purchase and subsequent profit of a whopping total of around $1.5 billion came immediately prior to a lie from Trump that he had received a pair of phone calls from Chinese counterparts who had been seeking to keep trade talks going.