Sens. Mark Warner (D-Virginia) and Adam Schiff (D-California).
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Sens. Mark Warner (D-Va.) and Adam Schiff (D-Calif.) demanded answers about possible insider trading at government agencies in a letter Thursday to the Securities and Exchange Commission chairman and the Department of Defense inspector general.
The senators cited public reports of “large positions in stocks and equity-linked derivatives” being built up ahead of major policy announcements, including decisions related to the Iran war and President Donald Trump’s tariffs. And they suggested that these cases show that “federal authorities are disclosing material nonpublic information for financial gain.”
“Recent reports of stock trades occurring shortly before important government policy announcements suggest that federal authorities are disclosing material non-public information for financial gain,” the lawmakers wrote in a letter to SEC Chairman Paul Atkins and Defense Secretary Pratt Moring. “These actions undermine the public interest and the integrity of the market, and require oversight by the authorities as well as Congress.”
The letter comes after numerous reports that positions are being built up ahead of major policy announcements, with the potential for big gains afterwards. Prediction markets have taken similar heat recently, with the Financial Times reporting that brokers with ties to Defense Secretary Pete Hegseth were considering making multimillion-dollar acquisitions into defense-related funds before the White House launched a war against Iran.
Warner and Schiff, the top Democrats on the Senate Intelligence Committee, said in a statement: “The possibility that someone associated with the Secretary of Defense attempted to trade material non-public information is deeply concerning and has serious implications for the national security of the United States.”
They said, “The perception that material non-public information may be unevenly distributed in advance of government announcements risks undermining investor confidence and the health of U.S. capital markets.”
Mr. Warner and Mr. Schiff asked Mr. Atkins and Mr. Moring to answer a series of questions, including whether their agencies intend to review their trading activity. What tools are government agencies using to detect suspicious transactions? Whether the agency’s oversight is flawed. Both agencies take necessary safeguards and enforcement actions to prevent the unauthorized dissemination of nonpublic information and to prevent federal employees from using nonpublic information for personal gain.
“At a time when markets are becoming more sensitive to policy developments, it is important that all market participants operate on a level playing field,” they write.
“The Department of Defense OIG is reviewing the letter and has no further comment at this time,” said Molly Halpern, a spokeswoman for the Pentagon Office of Inspector General.
The SEC declined to comment on the letter.
