Feds investigating George Santos over Kalshi trades

WASHINGTON — Federal investigators are looking into whether former Long Island Rep. George Santos improperly placed a profitable, self-rigged bet on an online prediction marketplace, a charge Santos called "preposterous."

An "active investigation" is underway by the Commodity Futures Trading Commission, according to a person familiar with the matter who would not discuss any possible legal violations by Santos, who was expelled from the U.S. House in 2023 and later spent time in prison.

At issue is a wager Santos placed on Kalshi that he would not attend President Donald Trump’s State of the Union address in February, while publicly posting his intention to be there, sources told Newsday.

In a posting on the social media site X Wednesday morning, Santos asserted he was being flooded with inquiries from "100s" of news reporters, but that he knew nothing about referrals by Kalshi to federal investigators until a Tuesday report by NPR.

"So now my legal team is in contact with the DOJ to see what is going on," Santos said. "I will comment further when appropriate and clarify everything accordingly while being mindful and respectful of any process that might be underway."

The  basis of the accusation, he said, "is preposterous and I look forward to supplying any information asked of me to any agency that inquires, till then media please do not inquire."

A lawyer who has previously handled Santos' legal issues declined to comment.

The CFTC is the agency that regulates the country's derivatives markets, including futures, options and swaps — and now predictive markets like Kalshi and rival Polymarket. 

Santos  said in February he would be at the State of the Union in a video posted on X. The posting added to what was already millions of dollars of bets regarding who would show up, and impacted the odds that Santos would be at the speech.

A source said Kalshi later closed his account with the prediction site and referred the matter to federal agencies.

Nejat Seyhun, a finance professor at the University of Michigan, said the situation touches on unsettled legal territory. 

"This is probably not insider trading but could be (market) manipulation, which is also illegal," Seyhun said.

The relevant hook, Seyhun said, is language that prohibits the use of “any manipulative, deceptive, or fraudulent scheme in connection with swaps or commodity transactions.” 

Aside from legal questions, Seyhun said Kalshi’s own rules state any trader who is a "decision maker," directly or indirectly, or who has any influence on the outcome of an event is barred from trading on that event.

Santos, who represented a congressional district that includes parts of Nassau, Suffolk and Queens counties, became the sixth member of the U.S. House ever expelled in December 2023. That came after a Committee on Ethics report detailing misuse of campaign funds and lying on financial filings.

But federal prosecutors by then had already indicted Santos in 2023 on multiple charges of wire fraud, money laundering, theft of public funds, making false statements to Congress, identity theft and unauthorized use of donor credit cards. He initially pleaded not guilty, but ultimately admitted the charges in August 2024.

In April 2025, , Santos was sentenced to 7 years in prison. Months later, Trump commuted his sentence. In doing so, he described Santos on the social media site Truth Social as "somewhat of a rogue," but one Trump said had "the courage" to always vote Republican.