On July 31, 2026, the Commodity Futures Trading Commission (CFTC) announced an order filing and settling charges against a Former Congressman for engaging in manipulative activity in an event contract traded on a registered designated contract market — the CFTC specifically characterized the contract as an event contract “whose underlying event” the Former Congressman “controlled,” and alleged that he improperly traded on an event he had the power to influence. (See CFTC Press Release No. 9276-26; In re Santos, CFTC Docket No. 26-05.) The consent order requires the Former Congressman to pay a total of $35,000 — comprising approximately $17,500 in disgorgement of profits and a $17,500 civil monetary penalty — and imposes a three-year trading ban and a cease-and-desist requirement. The Former Congressman did not admit to wrongdoing; the order notes his cooperation in the investigation. In a public statement, counsel for the Former Congressman stated: “He chose a prompt, practical resolution rather than protracted, costly litigation, and that choice should not be mistaken for an admission of any wrongdoing, because it is not one.”
The contracts at issue related to whether the Former Congressman would attend the 2026 State of the Union address — a type of event contract offered on the DCM. According to the order, between February 12 and February 25, 2026, the Former Congressman traded contracts on this market while simultaneously making a series of public social media posts regarding his plans to attend or not attend the event. The CFTC found that the Former Congressman built positions in the contracts and then used social media posts — including material misrepresentations and omissions about whether he would attend — to move contract prices in a direction favorable to his positions before exiting at a profit. The order states that the Former Congressman “purchased swaps on a registered designated contract market and then engaged in a manipulative scheme to influence the contract price for the benefit of his trading position” and that “[h]e made public statements, including material misrepresentations and omissions, to influence the market in which those swaps were offered and traded.”
The CFTC charged the Former Congressman with violations of Section 6(c)(1) of the Commodity Exchange Act (CEA), 7 U.S.C. § 9(1), and CFTC Regulation 180.1(a)(1) and (3), 17 C.F.R. § 180.1(a)(1), (3) — the agency’s anti-manipulation and anti-fraud provisions. These provisions prohibit the intentional or reckless use of any manipulative device, scheme, or artifice to defraud, and any act, practice, or course of business that operates as a fraud or deceit, in connection with any swap.
Notably, the Designated Contract Market (DCM) independently identified the trading activity, conducted its own investigation, and referred the matter to the CFTC — illustrating the role that self-regulatory mechanisms at designated contract markets play in detecting and escalating potential misconduct in the event contract space.
The action represents another CFTC enforcement case involving manipulative conduct in event contracts and underscores the agency’s willingness to apply its existing anti-manipulation framework to this growing segment of the derivatives market. Participants in event contract markets — whether individual traders or the platforms that list these contracts — should take note of the CFTC’s focus in this area and the agency’s use of traditional enforcement tools to address novel forms of market manipulation.
