CFTC Staff Told to Retract Analysis of Suspicious Oil Trades, Bloomberg Reports

insider trading ahead of a market-moving announcement from President Donald Trump — and according to Bloomberg, a senior adviser to the agency’s Trump-appointed chairman told them to take it back. The Commodity Futures Trading Commission staff were ordered to retract a referral of suspicious oil-market trades, a move people familiar with the matter called highly unusual and one that has now drawn demands for congressional scrutiny.

The Commodity Futures Trading Commission's headquarters in Washington, D.C. (file photo)

An oil pumpjack at sunset. Suspicious oil-futures bets were placed minutes before President Trump's policy announcement. (file photo)

The Trades That Set Off Alarms

The trades in question were two large, remarkably well-timed bets placed shortly before President Trump announced changes to U.S. policy on Iran earlier this year — bets that had already prompted public questions about whether someone traded on advance knowledge.

According to Bloomberg’s reporting, on March 23, roughly $500 million was shorted in Brent and West Texas Intermediate crude futures between 6:49 and 6:50 a.m. Eastern Time — a single minute in which volume in Brent ran about nine times typical levels. Minutes later, Trump posted on Truth Social that he was pausing strikes on Iranian energy infrastructure.

Then, on April 7, roughly $950 million in additional bets on falling prices landed just hours before Trump announced a two-week ceasefire with Iran. Brent crude later fell as much as 14 percent.

In total, billions of dollars’ worth of contracts predicting oil would fall and the S&P 500 would rise were placed about 15 minutes before the president announced his policy U-turn, fueling widespread speculation about whether someone had an unfair advantage. One outlet’s account put it in stark terms: traders sold 6 million barrels of crude oil and $2 billion in S&P 500 futures in a two-minute window on March 23, and after the announcement, Brent crude prices declined by 14 percent.

How the CFTC First Responded

The Commodity Futures Trading Commission — the federal regulator charged with policing fraud and manipulation in the futures and derivatives markets — opened an investigation into the suspicious trading in April.

Chairman Michael Selig, appointed by Trump to lead the agency, publicly promised at the time that the commission would pursue anyone who traded illegally. “We will find you,” he said.

The commission sought trading data from exchange operators CME Group and ICE under its large-trader reporting rules, known as Tag 50 data, in an effort to identify who was behind the accounts that placed the well-timed bets.

Inside the agency, a team of career forensic analysts from the Division of Market Oversight did what they would normally do: they pulled together data on the day’s winners and losers, examined the timing of the trading and the identities behind it, and filed a referral to the Division of Enforcement — the arm of the agency that would decide whether to launch a full-scale investigation into potential insider trading.

The Retraction

What happened next, according to people familiar with the matter who spoke to Bloomberg on condition of anonymity, was highly unusual.

Mel Gunewardena, a senior adviser to Chairman Selig, told a supervisor within the market oversight team to retract the referral. Representatives from the two divisions had met and discussed how best to collaborate on the case before the order came down, the people said.

To be clear, retracting an enforcement referral is not the same as closing an investigation. But it removes the analytical basis that career staff had built for one — the foundation on which any enforcement action would have to stand.

Agency leadership has said the move was needed to conduct a broader review of international market activity, according to one outlet’s account. One report also said the Department of Justice has since opened its own inquiry into the trading activity, though the status and scope of that inquiry remain unclear.

Sen. Elizabeth Warren (D-Mass.), the ranking member of the Senate Banking Committee. (official portrait)

Warren Demands Answers

The revelations drew a swift response from Capitol Hill. On October 13, Senator Elizabeth Warren of Massachusetts, the ranking member of the Senate Banking, Housing, and Urban Affairs Committee, issued a formal statement calling the reported intervention disturbing.

“It is disturbing that a senior advisor to Chairman Selig may have intervened in efforts by agency career staff to do their jobs and investigate potentially billions of dollars worth of insider trading,” Warren said. She demanded that Selig and Gunewardena answer to Congress about the status of the agency’s investigations and potential enforcement actions.

Warren’s statement framed the episode as a test of whether market regulators can operate independently of political influence — a question that has taken on new urgency as presidential announcements continue to move energy markets sharply.

The story gained further traction in broadcast coverage. MS NOW devoted multiple segments to the Bloomberg reporting on October 14, with anchors and legal analysts discussing whether the retraction suggested political interference in a financial investigation.

 What This Means

At its core, this story is about one of the oldest questions in financial regulation: what happens when the people who move markets and the people who police them answer to the same political leadership.

Insider trading laws exist to ensure that no one profits from information the rest of the market cannot see. When billions of dollars in contracts are positioned minutes before a president’s surprise announcement — and when the career staff who flag that timing are then told to stand down — it raises a question that goes beyond any single trade: whether the watchdog is still independent.

For ordinary Americans, the stakes are not abstract. Oil prices feed directly into gasoline prices, heating costs, and inflation — the same cost-of-living pressures that have dominated the economic debate ahead of the November 3 midterm elections. If markets can be moved by leaked policy decisions, the losses land on everyone else: pension funds, small investors, and consumers who pay the prices that rigged markets produce.

The episode also sharpens congressional and press scrutiny of how the CFTC handles politically sensitive market-manipulation cases. As one analysis of the affair put it, the broader question hanging over energy markets all year is whether U.S. policy announcements are leaking into futures positioning minutes before they are made.

What Happens Next

The immediate question is whether Selig and Gunewardena will appear before Congress to explain the retraction, as Warren has demanded. The Senate Banking Committee has oversight authority over the CFTC, and a formal hearing — or even a demand for documents — would force the agency to put its version of events on the record.

Markets, meanwhile, will be watching what the CFTC does with the Tag 50 data it collected and whether the enforcement division pursues the case on a different basis. The reported Justice Department inquiry adds another track that could keep the matter alive regardless of what happens inside the CFTC.

For now, the traders behind the well-timed bets remain unidentified publicly, and no charges have been filed. But with billions in profits on the table, congressional attention growing, and the midterms less than three weeks away, the pressure for answers is unlikely to fade.