The US Commodity Futures Trading Commission (CFTC) is examining a series of trades in oil futures placed shortly before major shifts in President Donald Trump’s Iran war policy, a person familiar with the matter said on Wednesday (Apr 15).
CFTC Chairman Michael Selig said in remarks prepared for delivery to Congress on Thursday that the agency will go after wrongdoers, but nothing in the testimony addressed any specific investigation and an agency spokesperson declined to comment.
“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,” Selig said in the remarks seen by Reuters.
The CFTC probe is focused on trading of oil futures contracts on platforms belonging to CME Group and Intercontinental Exchange, with investigators examining at least two instances of oil trades made on Mar 23 and Apr 7, the source said.
Well-timed trades may have generated millions of dollars in profits, drawing concern from lawmakers and legal experts that decisions around war and diplomacy can create opportunities for abuse in volatile and opaque derivatives markets.
Investors placed an approximately US$950 million bet on oil prices just hours before the US and Iran announced a ceasefire last week. There was similarly well-timed trading in the oil market on Mar 23.
The data requested from the exchanges includes the so-called Tag 50 identifications of the entities behind the trades.
“At CME Group, we vigorously surveil our markets and work closely with the CFTC to oversee trading activity,” a CME spokesperson said in a statement, adding that any review of market behaviour must include all venues, including prediction markets that list related products with little to no visibility.
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