* Experts see trades as unusual, suspicious

* Trades involved options, commodities futures and

prediction markets

* Oversight of prediction markets in flux as popularity

grows

By Douglas Gillison, Saqib Iqbal Ahmed and Anirban Sen

WASHINGTON/NEW YORK, March 29 (Reuters) - Well-timed

trades ahead of U.S. President Donald Trump's major policy

surprises during his second term have potentially led to

millions of dollars in profits for unknown traders, leading some

legal experts to say they should be investigated to protect fair

markets and ascertain whether information is leaking.

A Reuters review of trading ahead of major Trump administration

decisions on tariffs, Venezuela and Iran that led to significant

market moves showed at least four instances where the legal

experts said it appeared investors knew what would happen

shortly before it did. The trades occurred on different types of

markets and assets - options, commodities futures and

predictions.

Given their timing and size, the trades warrant scrutiny to

ascertain if they were based on inside government information,

said the experts, who include a former enforcement director for

the Commodity Futures Trading Commission and three academics who

have studied insider trading.

"It looks deeply suspicious," said Andrew Verstein, an

expert in insider trading at UCLA School of Law, adding that

while the examples are limited in number, they show patterns you

"would expect to see if there were informed trading by

government officials and their friends."

Aitan Goelman, a former CFTC enforcement director and former

federal prosecutor, said such trading would normally draw

scrutiny, although he added that insider trading law for

commodities markets is complex and still relatively uncharted.

The exchanges, CFTC and DOJ would typically find such trades

"anomalous and interesting," Goelman said.

White House spokesman Kush Desai said government ethics

guidelines bar federal employees from profiting off nonpublic

information. "Any implication that Administration officials are

engaged in such activity without evidence is baseless and

irresponsible," he said in an emailed statement.

A CFTC spokesperson said the agency was in constant

communication with exchanges "over trades that raise red flags"

and that it conducts its own surveillance but did not say

whether it had opened an investigation into the wagers.

The Securities and Exchange Commission declined to comment,

while the Justice Department did not respond to a request for

comment.

To be sure, some traders may have gotten very lucky or spotted

signs of impending action the rest of the market missed,

especially with Wall Street firms increasingly leaning on

ex-military and national security advisers. Some trades may have

been hedges for exposures taking the other side of the bet,

which is common in macro-driven commodities portfolios.

ENFORCEMENT RECORD IS PATCHY

Trading with material and nonpublic information is typically

considered illegal if the person has a duty not to, such as

through an employment or confidentiality requirement. But the

enforcement record is patchy across different assets and

exchange venues.

While insider trading has been banned for over a decade in

commodities and derivatives markets, for example, there is

little precedent for bringing such cases in those markets,

according to legal experts. Oversight of prediction markets,

where some of the bets were made, is in flux.

Top SEC officials have said they intend to focus on more

bread-and-butter fraud in securities markets, such as insider

trading, yet many lawyers, investors and other observers say

regulators have taken a softer enforcement stance during Trump's

second administration.

Steve Sosnick, chief strategist at Interactive Brokers, said

the trades in question involved a patchwork of regulators like

the SEC and CFTC and prediction markets, where the legal basis

is murky. "If this was a single actor or a set of cooperating

actors, it would require a high level of coordination between a

diverse and dedicated group of regulators to get to the root of

the issue," Sosnick said. "We have seen no evidence that this is

occurring."

Sosnick added that the recent resignation of the SEC's

enforcement chief amid reports of frustrations made it "hard to

imagine this becoming a high priority among regulators."

WELL-TIMED TRADES

The Reuters review found four prominent instances where trades

stood out for their timeliness. In April 2025, options traders

made millions in late-breaking bets in the minutes before Trump

announced a pause on his blanket "Liberation Day" tariffs,

sparking a 9.5% jump in the S&P 500.

In January, an unknown Polymarket punter took in more than

$400,000 after betting on the ouster of Venezuelan President

Nicolas Maduro that month. The anonymous account was created the

previous month, and placed more than $30,000 in bets that would

pay off if the U.S. invaded Venezuela by January 31.

Bets placed on prediction markets like Polymarket and Kalshi

ahead of the February 28 killing of Iranian Supreme Leader

Ayatollah Ali Khamenei sparked fresh insider trading and ethics

concerns. Analytics firm Bubblemaps identified six accounts that

made a combined $1.2 million profit from Polymarket bets that

were funded in the hours immediately before the U.S.-Israeli

attacks that killed Khamenei.

This week, unidentified traders made a $500 million oil bet

minutes before Trump sent crude plunging by announcing he was

delaying an assault on Iranian energy assets. The bets were

placed on the New York Mercantile Exchange, which is owned by

CME Group ( CME ).

A CME spokesperson declined to comment on the oil futures

trades or whether the exchange operator was reviewing the

trades.

Earlier in March, both Kalshi and Polymarket introduced new

rules to crack down on potential insider trading on their

prediction market platforms. A Kalshi spokeswoman said it will

continue to "enforce as necessary and iterate on our existing

technologies and partnerships," adding that bets of the

magnitude of the oil futures transactions on March 23 would have

been flagged if they had been placed on Kalshi's platform.

In an interview, Polymarket's chief legal officer, Neal

Kumar, said Polymarket monitors and tracks all transactions that

go through its U.S. platform in real time, and that the company

has a set of controls that can quickly crack down on suspicious

trading activity.

Some of the experts said the sheer size and binary nature of

some of the bets raised the possibility that people may have had

advance knowledge. Monday's $500 million oil market trade, for

example, indicates extreme conviction as well as deep pockets,

some of the experts said.

"When you're dealing with bets on unique events and things

like that, those do raise a lot more suspicion that somebody has

some specific inside information," said David Rosenfeld, former

co-head of enforcement at the SEC's New York office.