If you had a writers' room brainstorming prediction market stories, someone would pitch this in the first ten minutes. UPDATED

From NPR: 

DOJ is investigating former congressman George Santos for insider trading on Kalshi

 

In February, four months after being released from federal prison, former Republican congressman George Santos took to social media to express his enthusiasm about attending President Trump's upcoming State of the Union address.

"I'm going to be there for the State of Union in the gallery, guys," Santos said in a video he posted to X a day before the president's remarks.

At the time, traders on the prediction market site Kalshi were placing millions of dollars worth of bets on who would attend. Santos' video confirming his presence sent odds soaring.

But he didn't show up.

"Watching SOTU from an airport tv was not part of the plan! FML," Santos wrote on X, using slang for a more coarse way of saying, "screw my life."

He posted the message as Trump was speaking, making those same odds in the Kalshi market plummet.

What Santos didn't say was that he had already placed bets on Kalshi that he was not going to appear at the State of the Union address, according to three people with direct knowledge of his trades who were not authorized to speak publicly. They say Santos misled the public and turned a profit based on that deception in the tens of thousands of dollars.

This is a fun story, and there would certainly be a certain poetic justice to George Santos returning to jail—in a less corrupt system, he would still be there—but I'm not sure it would be actual justice in the sense that it's not clear that what he did was illegal, based on the current interpretation of insider trading and, more importantly, how absurdly narrow the concept of financial crime has become.

Over the past 45 or so years, we have watered down laws, neutered regulators, and decided as a society that various frauds and market manipulations that would have made the original robber barons blush are now acceptable and even praiseworthy. The world's richest man's fortune was built on schemes like getting his hand-picked Tesla board to buy (or perhaps more accurately, to get the company's stockholders to buy) a money-losing SolarCity for top dollar before the bottom fell out, and that's just one in a long list. The president of the United States has made billions of dollars during a term that is less than a year and a half old.

Personally, I think it would be great if we started passing stronger laws against financial crimes and started aggressively pursuing people who broke those that are currently on the books, but there is something simply embarrassing about going after venial sins while rewarding mortal ones.

I remember a quote from Jonathan Swift to the effect that laws were like spider webs. They were good at catching flies and gnats, but wasps and hornets flew through unbothered.

It is seldom a good sign when current events bring to mind quotes from Jonathan Swift. 

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Update from Bobby Allyn:

I was winding down my work day here in Los Angeles when my phone rang at 5:37 p.m. from a blocked number. It was former Congressman George Santos. He was boiling with rage.

The day before, I published a story revealing that the Justice Department and the Commodity Futures Trading Commission had opened investigations into his trading activity on the prediction market site Kalshi.

...

Before the story, I emailed him, and he called me from a blocked number. So when my phone buzzed again from a blocked number, I had a pretty good sense of who it might be.

Santos, whose political rise and fall was characterized by a notorious trail of lies and falsehoods, claimed my story was riddled with errors. He said "my lawyers have been calling the Department of Justice all day, and they can't find any investigation."

As we were talking, I asked if I could record the call. He said no. I was in front of a keyboard, though, furiously jotting down every word.

I asked him who his lawyers are, and he refused to answer. I questioned whether he really does have attorneys. He replied: "I'm George f*cking Santos, of course I have a legal team."

He then proceeded to name-call and attack the reputation of NPR, the kind of invective that's common when reporting on people who try to discredit reporters and news organizations for stories they don't like.

What Santos said next took me aback, even by his outlandish and brazen standards.

"This story is going to get you a gun in your face," Santos said.

I asked him what he meant by that.

"You know what I mean."

It did not exactly feel like an imminent threat to my life that a convicted fraudster expelled from Congress who lives thousands of miles away from me in Pennsylvania's Pocono Mountains was lodging violent words at me.

It felt more bizarre than threatening, but then it grew even stranger and more confusing.