CFTC Chairman Says Enforcement Is Reviewing Oil Trades Placed 15 Minutes Before Trump's Iran Reversal

CFTC Chairman Michael Selig said on Bloomberg Television on Friday, Oct. 23, that the agency's enforcement division has been scrutinizing crude oil trades tied to the Iran war, going back to March 23.

"Our enforcement division has been looking at all these trades," Selig said. "We take this stuff very seriously." He added: "We are on top of this and, rest assured, people can have confidence in the markets as long as I'm in the seat."

No finding of insider trading has been established. No charges have been filed.

What the trading looked like

On March 23, starting at 6:49 a.m. Eastern, traders sold Brent and WTI contracts covering at least 6 million barrels in a two-minute window. That was more than 8.5 times the volume traded at the same time of morning the previous week, according to Bloomberg's analysis of the data.

S&P 500 futures showed unusual activity too. Bloomberg reported contracts with a notional value above $2 billion changed hands in a short span, well beyond normal pre-market volume.

About 15 minutes later, Trump posted on Truth Social that he was backing off his threat to strike Iranian power plants. He had warned the U.S. would hit Iranian infrastructure if Iran did not reopen the Strait of Hormuz.

Brent fell as much as 14% after the post. U.S. crude also dropped by double digits, and U.S. and European stocks climbed back from their lows, rising roughly 4%.

Tim Skirrow, head of derivatives at Energy Aspects, said the trades came ahead of a major news release and suggested "either extraordinary luck or prior knowledge of the news." He added that public data alone cannot show which it was.

The withdrawn referral

According to Bloomberg, citing people familiar with the matter, career analysts in the CFTC's Division of Market Oversight reviewed the day's trading and sent leads to the Division of Enforcement. Enforcement decides whether to open a full insider-trading investigation.

Those people said Mel Gunewardena, a senior adviser to Selig, then told a supervisor to withdraw the referral. They described the move as highly unusual.

The agency has a different account of why. An agency official told Bloomberg that a broader international review was warranted and that Gunewardena was well positioned to lead it. The CFTC has not publicly explained the withdrawal beyond that.

Enforcement Director David Miller, speaking at a New York conference, said the agency has looked at the trading "from the beginning" and that the investigation remains open, according to Reuters. Bloomberg also reported that the Justice Department opened a parallel inquiry. The Justice Department has not publicly confirmed that.

Earlier questions to Selig

Selig has faced this before. At an April 16 congressional hearing, lawmakers pressed him about roughly $500 million in oil and equity futures positions ahead of the March announcement. Rep. Jim McGovern, D-Mass., asked specifically about the March 23 trades.

Selig said the agency has a zero-tolerance policy toward fraud, manipulation and insider trading and that "we will bring actions against those who engage in that behavior." He declined to discuss specific investigations.

Lawmakers also raised six newly created Polymarket accounts that reportedly earned about $1.2 million on contracts tied to the Feb. 28 U.S. strikes on Iran. Separately, the blockchain analytics firm Bubblemaps flagged nine linked Polymarket accounts that won more than $2.4 million on bets about U.S. military outcomes in the conflict.

An agency stretched thin

Investor advocates and lawmakers have voiced alarm that the CFTC's enforcement work is tapering off, according to Reuters. The agency is losing staff even as it takes on oversight of a fast-growing prediction markets industry, and its enforcement caseload has shrunk since 2024.

The CFTC's inspector general recently pushed a planned enforcement review to fiscal year 2027, citing shifting priorities and resources.

Selig said the agency is also watching prediction markets for tampering before the U.S. midterm elections. Miller said staff "have investigated, and may have open investigations about some candidates who have placed trades on contracts that are based on their own elections."

Nobody on the record has said the traders had advance word of Trump's decision. Nobody has identified who they were. The data shows the trades came minutes ahead of the news and that they were large. That is all it shows so far.

What to watch

The open questions are specific. Who was on the other side of the 6 million barrels? Why was the referral pulled, and has enforcement since picked up the same leads? Selig's pledge to bring cases is now on the record. The test is whether the CFTC files one.