Former Representative George Santos has been fined $35,000 over allegations that he engaged in insider trading by placing bets on a prediction market about whether he would attend President Trump’s State of the Union address, federal regulators announced on Friday.
Mr. Santos, according to the Commodity Futures Trading Commission, deceived bettors on Kalshi, the prediction market, into believing that he would be attending the February speech by making a series of social media posts.
Then Mr. Santos himself bet against his attendance. In total, Mr. Santos made around $18,000 through manipulated trades over a period of two weeks in February, according to the C.F.T.C.
Mr. Santos has agreed to pay a civil penalty for the misstatements, in addition to surrendering the profits, the agency said.
A spokeswoman for Kalshi said the company had investigated the trades by Mr. Santos and reported them to the C.F.T.C., “providing the evidence needed to secure an action against him.”
Mr. Santos did not respond immediately to a request for comment.
The settlement represents the latest admission by regulators of insider trading and other abuses on the fast-growing, lucrative platforms. Prediction markets and the C.F.T.C., which regulates the industry, have faced widespread scrutiny over whether they are effectively policing bad behavior. The New York attorney general on Friday sued Kalshi, accusing the company of operating in defiance of laws aimed at curbing unregulated gambling.
One popular bet on Kalshi in February was the guest list at the State of the Union, and Mr. Santos’s planned appearance had become a topic of discussion among many users.
Mr. Santos, 38, was charged with fraud by federal prosecutors in 2023 and expelled from his seat as a New York Republican in Congress, after The Times and other outlets raised questions about his financial dealings and reported that he had lied extensively about his biography. He was sentenced to seven years and three months in prison in 2025, but was released after fewer than three months when President Trump commuted his sentence.
Two weeks before the State of the Union in February, Mr. Santos started making a series of posts on social media that indicated he would be attending the speech. On Feb. 11, he created an account on Kalshi. From Feb. 12 to Feb. 22, regulators said, he bet about $6,700 that he would be attending.
He teased his supposed appearance on X, causing the market to fluctuate significantly. Mr. Santos bet both sides.
For example, on Feb. 22, Mr. Santos posted on X asking his followers whether he should “wear a muted serious suit to the SOTU or a bedazzled one?”
That query caused the value of betting on Mr. Santos’s attendance to shoot up. The next day, regulators said, Mr. Santos exited his position and made about $3,400 in profits.
The day before the speech, Mr. Santos wagered thousands of dollars that he would not be attending the speech. At the same time, he kept telling his followers that he would be going.
“I’m gonna be in the gallery,” Mr. Santos said in a video posted on X.
The morning after the speech, Mr. Santos profited more than $14,000.