George Santos Settles Federal Investigation Over Suspicious Trades

George Santos, a former congressman, agreed on Friday to pay $35,000 to settle a federal investigation regarding his trades on the prediction marketplace Kalshi. He bet against his own plans to attend President Donald Trump’s State of the Union address. Santos, who once served as a Republican lawmaker from New York, stated he settled with the Commodity Futures Trading Commission to “put this matter behind him,” and did not admit to any wrongdoing.

“He chose a prompt, practical resolution, rather than protracted, costly litigation,” said Santos’ lawyer Joseph Murray in a statement shared on X. “That choice should not be mistaken for admission of any wrongdoing, because it is not one.”

The settlement includes repayment of more than $17,000 that Santos earned from unlawful trading and a $17,500 fine. In addition, Santos faces a three-year trading ban. Kalshi, which reported Santos to regulators, plans to pursue its own enforcement action and aims to reimburse traders if monetary penalties are obtained.

Before Trump’s February speech, Santos frequently mentioned his attendance plans. However, he posted on X during the speech saying he was stranded at the airport and couldn’t attend. Social media users noted that Kalshi had placed the odds of Santos attending at 75%.

“I guess people lost money,” Santos commented on his podcast in March. “Some people made unexpected money. That’s to show you how fragile these markets are.” This investigation led rival platform Polymarket to sever ties with Santos in June.

In his statement, Santos’ lawyer stated that Santos genuinely planned to attend the State of the Union, having booked a flight and hotel, but a winter storm thwarted the plans. “Mr. Santos concealed neither his intention to attend nor his change of plans to not attend the SOTU,” Murray remarked. “There was absolutely no intent to deceive any person, nor intent to manipulate any market.”

George Santos once rose to political fame after winning a seat representing parts of Queens and Long Island in New York City. However, his claims of being a wealthy Wall Street player unraveled quickly. Santos was eventually expelled from Congress and faced federal charges of wire fraud and identity theft as investigators examined his campaign funding. He pleaded guilty and served under three months of a seven-year sentence before receiving clemency from Trump last year.