Ex-Rep. George Santos to pay $35K to settle illegal trading probe

Disgraced former U.S. Rep. George Santos, whose 87-month federal prison sentence for fraud and identity theft was commuted by President Donald Trump in October, has agreed to pay $35,000 to settle a federal investigation into unlawful trading after placing a bet that he would not attend the president’s State of the Union address – which he ultimately missed. “Mr. Santos has agreed to resolve the CFTC’s inquiry and to put this matter behind him,” Santos’ attorney, Joseph W. Murray, wrote in a statement. “Critically, and consistent with how these regulatory matters are commonly resolved. Mr. Santos has settled without admitting any of the commission’s allegations, findings or conclusions. He chose a prompt, practical resolution rather than protracted, costly litigation, and that choice should not be mistaken for an admission of any wrongdoing because it is not one.” According to the Commodity Futures Trading Commission, Santos profited $17,569.98 after placing bets on Kalshi, a federally regulated prediction market where users can bet on real-world events, that he would not attend the president’s State of the Union address in February. Users were placing bets in the millions of dollars on who would and would not be in attendance at the address. Leading up to the State of the Union, Santos, who previously represented New York’s 3rd Congressional District on the North Shore of Nassau County and northeastern Queens, had posted on social media that he would be in attendance. But after the address had already begun, Santos posted on social media that he was unable to attend and was watching the event live from an airport. But according to reports, Santos had placed bets on Kalshi that he himself would not attend the address. The bets were flagged by Kalshi, which reported the trading to the Commodity Futures Trading Commission and the Department of Justice and froze his account. Both departments have opened investigations into this report, according to reports. Murray wrote in a statement that this was the first time Santos had placed a bet on a prediction market betting application like Kalshi. He added that Santos intended to attend the State of the Union address, booking flights and hotels to travel to Washington, D.C., for the event. The commission announced Friday, July 31, that Santos would have to give up money he had made from the bet, as well as pay a civil monetary penalty of $17,500, totaling $35,000. Santos is also banned from trading for three years. The incident occurred just four months after Santos was released from federal prison after serving 12 weeks of his 87-month sentence for identity theft and wire fraud. His early release is due to Trump issuing a commutation of his sentence, who said the former representative was a governmental “rogue” and had been “horribly mistreated” while incarcerated.