(Investing) – WASHINGTON – Washington’s top derivatives regulator on Thursday reassured lawmakers that the United States will punish fraud as concern mounts on Capitol Hill that oil, stock and prediction market players are illicitly trading on inside information from the White House, according to prepared remarks seen by Reuters.
The first congressional testimony by the current chair of the U.S. Commodity Futures Trading Commission, Michael Selig, comes a day after media reports that his agency is investigating a series of oil futures trades executed shortly before major policy shifts by President Donald Trump.
The remarks are also a nod to the sudden spotlight in which the comparatively low-profile agency – which currently only has one sitting member, Selig, rather than its normal five – now finds itself.
In prepared remarks, Selig warned anyone engaged in fraud, manipulation or insider trading: “We will find you and you will face the full force of the law.”
However, under questioning from the committee’s top Democrat Angie Craig, Selig said the CFTC would not wait to issue new regulations until the remaining four members of the five-member commission are confirmed.
“We cannot, for the sake of the American people, slow down in our rulemaking,” he said. “It’s very important that we get investor protections, consumer protections and safeguards for our markets, and so I cannot, unfortunately, commit to not do my job that I was appointed to do by the president,” Selig said during testimony before the House Agriculture Committee.
A Reuters review of trading ahead of major Trump administration decisions on tariffs, Venezuela and Iran that led to significant market moves showed at least four instances where legal experts said it appeared investors knew what would happen shortly before it did.
Many of these trades fall within the CFTC’s jurisdiction. The agency’s new enforcement director, David Miller, said last month that policing insider trading and market manipulation were priorities for the agency.
Selig also defended his agency’s assertion of sole jurisdiction in overseeing prediction markets, which critics liken to state-regulated gambling, and its work with the Securities and Exchange Commission in embracing what the agencies say will be a new era for digital assets.
With a current budget of less than $400 million, the CFTC, created in 1974, is charged with policing an expanding and increasingly complex set of markets for futures, swaps and event contracts, and it is poised to take on a central role in overseeing trade in digital assets.
The commission normally has five members, including two from the minority party, but Selig is currently its lone member.
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