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

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.