'Absolutely worth investigating' unusual oil trades tied to war, says fmr. SEC Enforcement Attorney

Summary

• Unusual oil trades occurred on Monday with a volume surge in WTI at 6:50 AM ET, 15 minutes before Trump posted on Truth Social halting planned attacks on Iranian infrastructure, after which oil plunged.
• $1.5 billion of notional value S&P futures were bought 14 minutes ahead of the event, moving the market and raising suspicions of insider trading or manipulation.
• Former SEC attorney Jacob Frenkel believes it is "absolutely worth investigating" to restore confidence in market integrity, suggesting the administration and regulators have an interest in doing so.
• Investigation jurisdiction: CFTC for oil (commodity futures), SEC for equity securities, with potential involvement of foreign regulators if trades occurred overseas.
• Frenkel references 9/11 when put option trading and short selling occurred before the attacks, but no enforcement actions resulted, leaving it a mystery.
• Suspicious trades also surround Liberation Day, indicating a pattern of potential insider knowledge ahead of geopolitical events.
• Investigation approach should start by pulling trade records, identifying traders, and connecting dots to information sources, following the money.
• Regulators like SEC and CFTC can take emergency actions, such as asset freezes, if wrongdoing is suspected.
• The former SEC chairman is now U.S. Attorney in the Southern District of New York and is conducting investigations involving prediction markets, with a criminal case already brought in Arizona.
• Jurisdiction matters significantly, as trading activity might involve overseas interests, complicating investigations and enforcement.