Warner, Schiff probe potential insider trading in government

Sens. Mark Warner, D-Va., and Adam Schiff, D-Calif., demanded answers on potential insider trading in 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 up before major policy announcements, such as decisions related to the Iran war and President Donald Trump‘s tariffs agenda. And they suggested those instances indicate “federal officials are disclosing material nonpublic information for financial gain.”

“Recent reports of equity trading that occurred shortly before significant government policy announcements suggest that federal officials are disclosing material nonpublic information for financial gain,” the lawmakers wrote in the letter to SEC Chair Paul Atkins and Pentagon IG Platte Moring. “These actions undermine public interest and market integrity, and demand oversight by each of your respective authorities, as well as by Congress.”

The letter comes after a slew of reporting that positions have been built up ahead of major policy announcements, which could yield a large benefit afterward. Prediction markets have caught similar heat recently, and the Financial Times reported that a broker associated with Defense Secretary Pete Hegseth looked to make a multimillion-dollar buy into a defense-related fund before the White House began the war against Iran.

Warner, the top Democrat on the Senate Intelligence Committee, and Schiff said the “possibility that someone connected to the Secretary of Defense may have been attempting to trade on material non-public information is highly concerning, and presents serious implications for U.S. national security.”

They said the “appearance that material nonpublic information may be unevenly distributed in advance of government announcements risks undermining investor confidence and the integrity of U.S. capital markets.”

Warner and Schiff asked Atkins and Moring to answer a series of questions, including whether their agencies intend to review the trading activity; what tools their agencies use to detect suspicious trading; whether there are gaps in their agencies’ monitoring; and the safeguards and enforcement measures both agencies have to prevent the unauthorized dissemination of nonpublic information and to prevent federal officials from using nonpublic information for personal gain.

“At a time of heightened market sensitivity to policy developments, it is critical that all market participants operate on a level playing field,” they wrote.

“The DoD OIG is reviewing the letter and we have no further comment at this time,” Defense Department inspector general’s office spokeswoman Mollie Halpern said.

The SEC declined to comment on the letter.