US derivatives chief to lawmakers, fraud and insider trading will be punished

Washington’s derivatives regulator moved to project toughness at a moment when lawmakers are increasingly worried that political information is leaking into markets fast enough to move oil, stocks and prediction contracts before the public ever sees the news.

In prepared remarks seen ahead of the hearing, Commodity Futures Trading Commission Chairman Michael Selig said the agency would pursue market abuse aggressively. “I want to be crystal clear: to anyone who engages in fraud, manipulation, or insider trading in any of our markets: we will find you, and you will face the full force of the law,” he said.

The warning landed against a backdrop of heightened suspicion on Capitol Hill. Federal investigators are examining a series of oil-futures trades placed shortly before major shifts in President Donald J. Trump’s Iran-war policy, including at least two instances on March 23 and April 7. The probe has also focused on trading that may have generated roughly $950 million in oil-price bets just hours before a U.S.-Iran ceasefire announcement, and investigators have sought Tag 50 identifications for the entities behind the trades.

The scrutiny has widened beyond crude. The White House warned staff against improperly leveraging their positions to place bets in futures markets during the Iran war, underscoring how closely political access and market behavior are now being watched. For regulators, the challenge is no longer limited to classic futures and options. Prediction markets, energy contracts and other politically sensitive instruments have become faster, more visible and more vulnerable to abuse when policy moves can reshape prices in minutes.

Selig, who became the 16th CFTC chairman on December 22, 2025, after being nominated by Trump on October 27 and confirmed by the Senate on December 18, has already signaled that enforcement will center on insider trading, market manipulation, market abuse and disruptive trading, retail fraud, and willful anti-money-laundering and know-your-customer violations. That posture was reinforced on March 31, when CFTC Director of Enforcement David I. Miller said the agency’s remit now extends across more than $400 trillion in notional-value swaps, prediction markets and crypto assets.

The commission has also tried to show it is not simply chasing misconduct after the fact. On March 12, it issued a prediction-markets advisory that encouraged growth and innovation while reminding designated contract markets of their obligations under the Commodity Exchange Act. But the regulatory line is still being drawn in real time, and Congress has begun to respond. On March 25, House lawmakers introduced the PREDICT Act, which would bar covered individuals, including members of Congress, the president, the vice president, political appointees, certain executive-branch employees and judicial officers, from trading on prediction markets.

Taken together, the hearing became more than a warning about fraud. It was a credibility test for market oversight in an era when war, tariffs and political access can send money racing across oil pits and event contracts before regulators, lawmakers or the public fully understand what moved.