Senators Elizabeth Warren (D-MA) and Jeff Merkley (D-OR) have asked White House Counsel Will Scharf to explain what stops White House staff from betting on prediction markets with information they get at work, and they want the answers by 23 November. Their letter is dated Monday 9 November, the Grants Pass Tribune reports, and Fortune reported it on Tuesday. It follows a civil case in which the Commodity Futures Trading Commission (CFTC) ordered President Trump’s former teleprompter operator, Gabriel Perez, to give up $107,539.02 of Kalshi profits and pay a $65,000 penalty, according to the CFTC’s 28 August release.
No answer from the White House had been published by Thursday morning. It did not immediately respond to requests for comment from Fortune on 10 November or from The Block on 11 November. What Scharf’s office says, if anything, will be read closely: Warren is expected to chair the Senate Banking Committee from January.
What the senators ask about prediction market insider trading
The senators write that the White House has not taken “meaningful action to address ethics concerns”, in words quoted by The Block. Their main charge is that a warning memo sent to staff is not enough. According to The Block, they want the White House to look at what other administrations have done, including mandatory training.
The questions, as the three outlets report them, fall into two groups. The first is about rules: what safeguards keep staff from profiting on confidential government information, whether staff are trained on the rules against trading or betting on nonpublic information, and what has changed in White House policy since the Perez trades came to light. The senators also want a copy of the memo itself, along with records of internal investigations, ethics training and employee financial disclosures.
The second group is about other people. The letter asks whether other employees “misappropriated insider knowledge” to place bets or trades (The Block’s quote) and whether any have been investigated. It asks whether anyone at the White House spoke to the CFTC or the Justice Department about the Perez case, and if so who. According to the Grants Pass Tribune, it also asks whether presidential clemency would be considered if Perez ever faced criminal liability. The Tribune notes that this question does not mean a prosecution is pending or that a pardon has been discussed.
The 23 November date is the senators’ own request. It is not set by a court, and nothing obliges the counsel’s office to meet it.
The Perez case: Kalshi bets on Trump’s words
Perez bought Kalshi “mention market” contracts, which pay out if a public figure says a given word or phrase in a speech. Between December 2025 and February 2026 he traded on words Trump would use. The CFTC says his job gave him access to presidential speeches before they were delivered, and that he misappropriated that information. Fortune reports that a July story alleged he made more than $100,000 on words in more than a dozen speeches.
Kalshi’s own surveillance caught the pattern. CBS News reported on 28 August that the trades did not fit typical patterns, that Kalshi froze his account with more than $90,000 of profits inside and that it referred the case to the CFTC. Press Secretary Karoline Leavitt called the affair “a disgrace” on 16 July, CBS reported, and Perez was placed on unpaid leave before leaving the job. The memo the senators find insufficient came from the White House Management Office and warned staff against using nonpublic information to bet on prediction markets, the Tribune reports. CBS dates a written warning from that office to March, before the affair became public.
| Item | Figure | Source |
|---|---|---|
| Profits to surrender | $107,539.02 | CFTC release, 28 August 2026 |
| Civil penalty | $65,000 | CFTC release, 28 August 2026 |
| Total sanctions | $172,539.02 (announced as $172,000) | CFTC release, 28 August 2026 |
| Trading ban | 3 years on CFTC-regulated markets | CFTC release, 28 August 2026 |
| Profits frozen by Kalshi | more than $90,000 | CBS News, 28 August 2026 |
| Trading period | December 2025 to February 2026 | CFTC release, CBS News |
The case stayed civil. The CFTC gave Perez a “substantial discount” on the penalty for his “exemplary cooperation”, its release says, and federal prosecutors in Manhattan declined to open a criminal investigation, the Tribune reports. The Tribune adds that the enforcement action did not establish that Trump, his family or any other White House employee took part in the trades.
Soldiers, strikes and earlier warnings
The senators are not writing about a single case. Fortune recalls that in April federal prosecutors charged a US soldier with using classified information to make more than $400,000 on Polymarket bets tied to the capture of Venezuela’s Nicolas Maduro, and that in February six new Polymarket accounts made about $1 million between them betting that the US would strike Iran. The military side has since been addressed by the Defense Department, which bars troops from betting on operations with nonpublic information.
Warren has worked the same seam from the platform side. On 31 October she and Republican John Curtis asked the two largest venues to count the insider-trading cases they have found. The new letter turns the question towards the employer, the White House, rather than the exchange.
Trump Jr., 1789 Capital and Truth Predict
The letter also brings in the president’s family. Fortune reports that Donald Trump Jr. advises both Kalshi and Polymarket, and that 1789 Capital, where he is a partner, has invested in Polymarket. According to the Tribune, the letter also cites a reported equity position in Kalshi among those interests, without giving its size. Trump Media, in which the president holds a stake through a trust, announced a prediction product called Truth Predict with Crypto.com in October 2025 and later cut it back to a marketing partnership, according to Fortune.
These are the senators’ concerns, not findings. The Tribune notes that the business relationships are not, by themselves, evidence of illegal activity, and nothing in the CFTC case ties Trump Jr. to Perez’s trades.
Why a minority letter carries more weight from January
Democrats won both chambers in the midterms, and Warren is set to lead Senate Banking when the new Congress sits in January, The Block reports; Fortune says she is expected to chair the committee. Coindaro looked at what her chairmanship means for crypto bills. On prediction markets, she has said she wants to end the “Wild West-style lack of oversight”, The Block reports. A request a minority senator sends today can come back as a committee request next year.
The White House is not the only target. Rep. Ro Khanna (D-CA) called on Tuesday for Congress to ban sports prediction markets, describing them as “sports betting disguised as financial trading”, Fortune reports. The courts and the regulator are moving too: a New York judge has ruled that Novig’s sports contracts are betting, and Politico has reported a CFTC warning to Kalshi, as we reported on 11 November.
For readers new to the products: a prediction market lists contracts that pay $1 if an event happens and nothing if it does not, so the price reads as a crowd’s probability. Mention markets apply that to words in a speech, which is why someone who reads the text in advance holds an edge no rule allows. Our guide explains how prediction markets work and how US law treats them.
The next date is Monday 23 November, the senators’ deadline.
1 comment