US CFTC chair vows enforcement amid oil futures trading scrutiny

The US Commodity Futures Trading Commission will remain vigilant against market manipulation and insider trading, CFTC Chair Michael Selig reassured lawmakers April 16, a day after media reports that the commission had opened an investigation into crude oil futures trades made just before announcements by US President Donald Trump about the Iran war.

"I want to be crystal clear -- to anyone who engages in fraud, manipulation or insider trading in any of our markets, we will find you and you will face the full force of the law," Selig said in testimony before the US House of Representatives' Agriculture Committee, which oversees the CFTC.

On April 15, multiple outlets reported the CFTC had asked CME Group and Intercontinental Exchange to hand over data on trades made on both exchanges' platforms immediately before Trump announced steps toward reduced hostilities with Iran, including before the two-week ceasefire announcement on April 7.

Selig did not confirm the existence of any investigation during his testimony, but repeatedly insisted to lawmakers that any abusive trading practices would be aggressively regulated and said the agency had "numerous investigations ongoing."

"We're actively policing and surveilling these markets," Selig said. "I can't speak to any particular investigation, the existence of an investigation or not, because, of course, that would hinder the investigation itself. But we are a cop on the beat and we will continue to be."

The CFTC did not respond to a request for comment. Anita Lisky, a spokesperson for CME Group, did not confirm or deny the existence of the investigation, but told Platts, part of S&P Global Energy, that "we vigorously surveil our markets and work closely with the CFTC to oversee trading activity."

An Interncontinental Exchange spokesperson declined to comment.

Political pressure

Selig's testimony followed days of appeals by US Democrats, who have asked the CFTC and the Securities and Exchange Commission to examine recent crude oil trades in the hours and minutes before key developments in the Middle East.

On April 14, Representative Richie Torres (Democrat-New York) wrote a letter to Selig and SEC Chair Paul Atkins calling for an immediate investigation into what Torres called "highly unusual trading activity" in the hours before Trump's public announcement of a ceasefire with Iran on April 7. Torres said traders placed an "approximately $950 million bet on declining oil prices shortly before the ceasefire became public, raising questions about potential insider trading and market integrity."

Torres' urging followed an April 9 letter to Selig from US Senators Sheldon Whitehouse (Democrat-Rhode Island) and Elizabeth Warren (Democrat-Massachusetts), who cited a March 23 surge in futures trading and "a $500 million oil bet" by "unidentified traders" minutes before Trump announced the US would delay its assaults on Iranian energy assets.

"This is now a recurring concern in the Trump administration," the Senators wrote.

CME data showed NYMEX front-month crude trading volume jumped to 2,139 contracts at 6:50 EST (5:50 CT) from 733 contracts at 6:49 EST on March 23. A larger spike in volume occurred at 7:05 EST, when 4,585 contracts traded. That coincided with a $7.60 price drop in two minutes to $90.99/b as of 7:06 EST.

"The Trump Administration has been a cesspool of corruption since day one, and these suspicious oil trades look like an appalling example of insiders rigging the market," Warren said in an April 15 statement responding to reports of the CFTC investigation. "This is a start, but CFTC and the SEC should do their job and investigate anything that looks like insider trading by Trump Administration officials."

Multiple lawmakers asked Selig to address the trades specifically April 16, including Representative Don Bacon (Republican-Nebraska), who asked whether the commission could track and examine the trades. Selig said the CFTC and the public had the visibility it needed to discover traders and positions under any investigation.

"The public has a line of sight into what's happening over the counter and on the exchanges," Selig said.

Oil volatility in focus

Selig told lawmakers the commission was "ramping up" its enforcement arm and actively hiring for posted jobs. Oil volatility resulting from the US-Israel war with Iran was among the top priorities for the CFTC's current enforcement personnel, Director of Enforcement David Miller said in a March 31 speech at the New York University Law School.

Energy market manipulation was "particularly, and perhaps uniquely harmful" because of its effects on physical supplies, Miller said in his remarks.

On April 10, White House spokesperson Dave Ingle confirmed to reporters that the administration had sent staff a memo warning against using nonpublic information to make stock trades or take positions on prediction markets like Polymarket or Kalshi. The memo acknowledged recent media reports about bets in Iran-related markets, CBS News reported on April 10.

Much of Selig's testimony focused on the regulatory treatment of predictions markets. Representative Nikki Budzinski (Democrat-Illinois) cited prediction market activity before the first US airstrikes on Iran that she said "looks like someone might have known some inside information, or at the very least was trading like they did." Other representatives asked how the agency viewed its role in the regulation of decentralized commodity platforms like Hyperliquid.

Selig said the commission's statutes gave it broad authority over such markets, and noted the CFTC had submitted a notice of proposed rulemaking and was actively soliciting public feedback on how it should further regulate such exchanges.

"We take enforcement absolutely critically seriously," Selig said. "This is a top priority of mine. As Chairman, I cannot have threats to our markets."