WASHINGTON, July 31, 2026 — The Commodity Futures Trading Commission has ordered former U.S. Congressman George Anthony Devolder Santos to disgorge $17,569.98 in profits and pay a $17,500 civil monetary penalty after the agency found that he engaged in manipulative conduct in connection with trading a Kalshi event contract tied to his attendance at the 2026 State of the Union.
The settlement, announced in CFTC Release No. 9276-26, also requires Santos to cease and desist from further violations of the Commodity Exchange Act and imposes a three-year prohibition on directly or indirectly engaging in trading on or subject to the rules of any registered entity. Registered entities must refuse him trading privileges during that period.
According to the CFTC, Santos traded both Yes and No positions in a Kalshi market on whether he would attend the February 24, 2026, State of the Union while making a series of public statements on X about his attendance and travel plans.
Trading activity
According to the order, Santos opened a Kalshi account on February 11, 2026. The Commission said his trading activity was limited to the market concerning his attendance at the 2026 State of the Union.
Beginning on February 12, Santos accumulated 30,874 Yes contracts with a total value of $6,695.94 while also purchasing an airline ticket to travel from New York to Washington, D.C., for the event.
On February 22, while holding the Yes position, Santos posted on X asking whether he should wear a “muted or serious suit” or a “bedazzled one” to the State of the Union. According to the CFTC, the price of the Yes contract subsequently increased from $0.15 to $0.70. Santos later sold his entire Yes position, generating a profit of $3,448.43.
After he was notified that his scheduled flight to Washington had been cancelled, Santos purchased a train ticket for travel to the event. The following day, he posted that his trip had become “a nightmare” and suggested that weather could prevent members from traveling to Washington for the State of the Union. According to the CFTC, the price of the Yes contract subsequently declined from $0.63 to $0.28.
Later on February 23, Santos posted that he would attend the event from the gallery and subsequently published a video stating that he would be there. The CFTC said the Yes contract price subsequently increased from $0.40 to $0.70. Approximately 40 minutes later, Santos began building a No position, ultimately accumulating 23,855 No contracts with a total value of $8,650.66.
According to the order, Santos’s train reservation was later cancelled because of the weather. Despite both his flight and train having been cancelled, Santos responded “I am” when asked on X whether he was actually going to attend the State of the Union. The Commission found that he did not publicly disclose the cancellations.
On February 24, the day of the State of the Union, Santos posted on X that watching the address from an airport television “was not part of the plan.” According to the CFTC, the price of the Yes contract subsequently fell from $0.73 to $0.02, making his No position highly profitable. The order states that Santos had not purchased alternative transportation to Washington by that time.
Santos exited his No position in the early hours of February 25, generating a profit of $14,390.57, according to the order.
CFTC findings
The Commission found that the Kalshi State-of-the-Union contract qualified as a swap under the Commodity Exchange Act. According to the order, event contracts can constitute swaps under one or more statutory definitions. The Commission determined that the contract at issue met at least two of those definitions because it depended on the occurrence or non-occurrence of a specified future event with potential financial, economic, or commercial consequences and was also a type of contract commonly known to the trade as a swap.
The CFTC found that Santos violated Section 6(c)(1) of the Commodity Exchange Act and Commission Regulation 180.1(a)(1) and (3). According to the Commission, Santos traded an event contract concerning an outcome he could influence and engaged in activity designed to affect the price of the swap for the benefit of his trading position.
The order further states that Santos made misleading public statements and omissions concerning his activities in relation to the underlying event. The Commission also found that Santos acted willfully or, at the very least, recklessly.
Settlement and sanctions
Santos submitted an Offer of Settlement that the Commission accepted. Without admitting the findings or conclusions contained in the order, he consented to its entry and to the resolution of the matter.
In addition to disgorgement of $17,569.98 and the $17,500 civil monetary penalty, the order requires Santos to cease and desist from further violations of Section 6(c)(1) of the Commodity Exchange Act and Commission Regulation 180.1(a)(1) and (3). Santos is also prohibited for three years from directly or indirectly engaging in trading on or subject to the rules of any registered entity.
The CFTC also acknowledged Santos’s cooperation during the investigation, stating that it assisted in the swift resolution of the matter.
Why it matters
The enforcement action marks a notable application of the CFTC’s anti-manipulation authority to a federally regulated event contract. By determining that the Kalshi contract at issue qualified as a swap under the Commodity Exchange Act, the Commission applied its existing anti-fraud and anti-manipulation framework to conduct involving that contract.
The case also underscores the regulatory risks associated with trading an event contract tied to an outcome that a participant may be able to influence. According to the CFTC’s findings, misleading public statements and material omissions made in connection with such trading may give rise to enforcement action under the Commodity Exchange Act and Commission regulations.
