Senator Mark Warner (D-VA) and Senator Adam Schiff (D-Calif.).
Nathan Posner | Anadolu | Tom Williams | CQ-Roll Call, Inc. | getty images
Senators Mark Warner, D-Va., and Adam Schiff, D-Calif., sought answers on possible insider trading in the government in a letter sent Thursday to the head of the Securities and Exchange Commission and the Department of Defense inspector general.
The senators cited public reporting of “large positions in equities and equity-linked derivatives” being built ahead of major policy announcements such as decisions related to the Iran war and President Donald Trump’s tariff agenda. And he suggested that those examples indicate that “federal officials are disclosing material non-public information for financial gain.”
“Recent reports of equity trading occurring shortly before important government policy announcements reveal that federal officials are disclosing material non-public information for financial gain,” the lawmakers wrote in a letter to SEC Chairman Paul Atkins and Pentagon IG Platt Moring. “These actions undermine the public interest and market integrity, and demand oversight by each of your relevant authorities, as well as Congress.”
letter comes after one subsidence Of reporting Positions are created ahead of major policy announcements, which can lead to big gains later. Forecast markets have taken similar heat recently, and Financial Times reported A broker tied to Defense Secretary Pete Hegseth wanted to buy millions of dollars into a defense-related fund before the White House launched a war against Iran.
Warner and Schiff, the top Democrats on the Senate Intelligence Committee, said, “The possibility that someone associated with the Secretary of Defense may be attempting to trade on material non-public information is deeply concerning, and presents serious implications for U.S. national security.”
“It appears that material non-public information may be unevenly distributed ahead of government announcements, which risks undermining investor confidence and the integrity of the U.S. capital markets,” he said.
Warner and Schiff asked Atkins and Moring to answer several questions, including whether their agencies intended to review the trading activity; what tools their agencies use to detect suspicious trading; Are there any lapses in the monitoring of their agencies; And both agencies must take safeguards and enforcement measures to prevent the unauthorized dissemination of non-public information and to prevent federal officials from using non-public information for personal gain.
“At a time of increased market sensitivity to policy developments, it is important that all market participants operate on a level playing field,” they wrote.
The SEC declined to comment on the letter, and the Defense Department IG office did not immediately respond to a request for comment.