Former congressman George Santos has agreed to a $35,000 settlement to resolve a federal investigation into questionable trades made on the prediction marketplace Kalshi. The investigation looked into Santos betting against his plans to attend President Donald Trump’s State of the Union address.
Santos, a former Republican from New York, settled with the Commodity Futures Trading Commission (CFTC) to resolve the matter without admitting any wrongdoing. His lawyer, Joseph Murray, explained that Santos opted for a quick and practical resolution to avoid lengthy litigation, stressing this does not imply any admission of guilt.
He chose a prompt, practical resolution, rather than protracted, costly litigation, and that choice should not be mistaken for admission of any wrongdoing, because it is not one,Murray stated.
The settlement includes more than $17,000 that Santos earned from what the CFTC deemed unlawful trading, plus a $17,500 fine. Additionally, the commission imposed a three-year trading ban on Santos.
Kalshi, the platform that reported Santos to regulators, stated it will pursue its enforcement action and work towards reimbursing traders if monetary penalties are recovered.
Leading up to Trump’s speech in February, Santos frequently mentioned his plans to attend. However, during the speech, he posted on X that he was stuck at the airport and could not reach Capitol Hill. Social media users highlighted that Kalshi had given Santos a 75% chance of attending.
At that time, Santos dismissed the criticisms, saying on his podcast, “I guess people lost money. Some people made unexpected money. That’s to show you how fragile these markets are.”
The federal inquiry led Polymarket, a rival prediction platform, to sever ties with Santos in June.
Santos’ lawyer reiterated his client’s genuine intention to attend the State of the Union, highlighting that hotel and flight reservations were made before weather conditions disrupted Santos’ plans.
Mr. Santos concealed neither his intention to attend, nor his change of plans to not attend the SOTU, from anyone,Murray reaffirmed.
Santos gained political recognition after winning a congressional seat for parts of Queens and Long Island in New York City. However, serious questions about his fabricated background soon emerged. He was expelled from Congress and faced charges of federal wire fraud and identity theft related to his campaign funds. Santos pleaded guilty and served less than three months before receiving clemency from Trump last year.