The Department of Justice and federal market regulators are reviewing several massive oil trades placed minutes before major Iran war developments that collectively generated more than $2.6 billion in profits, according to a new report.
By yourNEWS Media Newsroom
Federal investigators are examining a series of unusually timed oil market trades that generated billions in profits during key moments in the conflict involving Iran, according to a report from ABC News.
The Department of Justice and the Commodity Futures Trading Commission are reportedly reviewing four major transactions placed shortly before significant geopolitical announcements that caused oil prices to fall sharply.
The trades under investigation collectively yielded more than $2.6 billion in gains for individuals who correctly anticipated abrupt downward swings in crude oil prices tied to developments in the war.
Oil markets have experienced repeated volatility since the conflict began on Feb. 28, with prices fluctuating based on military activity, ceasefire discussions, infrastructure attacks and speculation over whether Iranian oil exports could return more freely to global markets.
According to the report, one of the first trades drawing scrutiny occurred March 23, when a trader placed a $500 million wager on falling oil prices just 15 minutes before President Donald Trump announced a delay in planned attacks on Iranian infrastructure.
Another transaction occurred April 7, when a $960 million position anticipating a drop in oil prices was placed only hours before Trump publicly announced a temporary pause in hostilities.
Investigators are also reviewing a trade made April 17, when approximately $760 million was committed to bets predicting oil prices would decline just 20 minutes before Iran announced the Strait of Hormuz would remain open to shipping traffic.
On April 21, another $430 million trade anticipating falling oil prices was executed approximately 15 minutes before a ceasefire extension was announced.
The London Stock Exchange Group reportedly flagged the trading activity because of the precision timing and scale of the transactions.
Concerns surrounding war-related financial speculation have extended beyond oil markets. Last month, The Guardian reported that the Iran conflict had triggered a surge in betting activity through online prediction platforms, with users wagering on military and political outcomes tied directly to the war.
According to one complaint filed with the Commodity Futures Trading Commission, six individuals allegedly earned approximately $1.2 million through wagers connected to predictions about when former Iranian Supreme Leader Ali Khamenei would be killed.
Legal experts told ABC News that proving wrongdoing in prediction markets and commodity trading tied to geopolitical developments remains difficult, even when trades appear highly suspicious.
Joshua Mitts, a law professor at Columbia University, questioned whether regulators currently possess the technological capability to effectively police sophisticated trading behavior tied to real-time geopolitical intelligence.
“Is the problem that we don’t have legislation or that we don’t have enforcement capabilities?” Mitts said.
“To have a law that can’t really be enforced effectively given the technological limitations, it’s sort of putting the cart before the horse,” he added.
Andrew Verstein, a law professor at the University of California, Los Angeles, said investigators would likely focus on whether the traders possessed nonpublic information before placing the transactions.
“We can’t say from the outset whether any of these trades were illegal. Any one of them could be lucky, and any one of them could be based on lawful information,” Verstein said.
“But many of them bear the hallmarks of suspicious trades that would naturally warrant investigation,” he added.
Craig Holman, a government affairs lobbyist for Public Citizen, said the sheer size and timing of the trades intensified concerns that some participants may have possessed advance knowledge of market-moving developments.
“Not only the timing, but the amount of these bets makes it look very likely that someone had insider knowledge… and placed very, very substantial bets on it,” Holman said.
“It’s a wild west phase, when we’re talking about the prediction market industry, and now it’s spilled over into the stock market as well.”
Federal officials have not publicly identified any individuals connected to the trades, and no charges have been announced.
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