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March 27 Big Business This Week: Insider trading: “What’s needed is enforcement — not new excuses.”

Somebody got rich quick on Monday morning. Just 16 minutes before President Donald Trump’s surprise decision to pause the bombing campaign against Iran, market records show traders bought about $1.5 billion in S&P 500 $SPX futures and sold about $500 million in crude oil $CRUDE futures.

After President Trump’s 7:06 a.m. social media post, the S&P futures rose between 0.9% and 1.3%, while oil futures fell about 15% even before the markets opened. That’s a potential profit of $40 to $50 million on the oil, and $18 million or so on the S&P futures. Did someone have advance knowledge of the market-moving announcement? To understand what happened and whether this was insider trading, BBTW Editor Peter Green spoke with Ben Schiffrin, a former SEC enforcement attorney who now runs securities policy for good-government group Better Markets.

There’s been a lot of chatter about those massive oil and S&P futures trades that hit just before President Trump announced he was pausing the bombing campaign in Iran. Was this insider trading?

“Certainly, the timing of the trade is highly suspicious. The age-old question on insider trading is, what are the chances that someone just happened to make the right trades at exactly the right time? It’s possible, but lots of times it’s unlikely. Normally, agencies like the Commodity Futures Trading Commission would go in and investigate to find out whether it was just coincidence or whether somebody actually had inside information and traded on it illegally.”

“Unfortunately, these days, the CFTC seems more interested in supporting prediction markets than in regulating the market. There’s really nothing preventing it from trying to figure out what happened here—the CFTC has long gone after insider trading. The problem is enforcement capacity. They’ve lost a lot of personnel and focus.”

How would regulators actually track down who made these trades?

“The CFTC can investigate, look at trading records, and then build up through the intermediaries that help facilitate the trade. There’s definitely a way they can trace it back… This is what makes it a little different from the potential insider betting sites like Polymarket where everything’s in crypto and anonymous. It would be very hard to figure out the identity of an insider bettor on those sites. But with these traditional commodities trades, the CFTC has experience unraveling that. They can subpoena records. Even in a digital age, there’s always a paper trail.”

“In garden‑variety insider trading cases, you often find a message or a text — some ‘Hey, you should be aware of this’ type note. That’s what investigations look for. As for whether it was a single trader or multiple entities? I don’t think anybody knows at this point. It’s just too early.”

You mentioned prediction markets like Kalshi and Polymarket — where users bet on political or military events — and how some have profited ahead of major actions.

“I think you have to separate what’s going on in prediction markets versus traditional commodities markets. On prediction markets, people don’t necessarily think there’s anything preventing them from using confidential information to bet. Up until recently, even Kalshi hadn’t said it would police for insider betting… You could easily see a trader saying, ‘I’ve got this intelligence, and there’s nothing stopping me from profiting off it.’”

“You need rules that prevent people from doing that — and then, of course, enforcement of those rules. With traditional markets like oil futures, the rules already exist; the problem is they’re not being enforced. The CFTC and the SEC have both been much less active in the last year. The CFTC, in particular, lost a lot of enforcement personnel and morale. So, I think it’s not that there aren’t rules to prevent insider trading — it’s that nobody seems to be focused on enforcing them. The leadership at the CFTC needs to get back to its core mission rather than being preoccupied with crypto and prediction markets. There’s no question the appearance of insider trading has become more frequent… from bets on strikes in Iran to wagers on Venezuela’s leadership changes. It’s all part of a pattern. ‘

Watch Big Business This Week on Cheddar—and YouTube!Big Businesses mentioned this week:$META ( ▼ 8.01% ) $GOOG ( ▼ 3.03% ) $EL ( ▼ 5.23% ) $RGR ( ▼ 3.33% ) $TSLA ( ▼ 3.36% ) $UBER ( ▼ 3.41% ) $RIVN ( ▼ 2.66% ) $LCID ( ▼ 7.35% ) $AMZN ( ▼ 1.99% ) $HMC ( ▼ 0.67% ) $SONY ( ▼ 2.51% ) $DIS ( ▼ 1.12% ) $WBD ( ▼ 0.48% ) $NXST ( ▲ 0.75% ) $YOU ( ▼ 1.4% ) $DAL ( ▼ 1.8% ) $UAL ( ▼ 0.09% ) $BA ( ▼ 2.42% ) Why the “Tehran TACO” trade is so much spicier than previous TACOs

Eat too many tacos and you need relief. But when you’re an investor, and the TACO is another move by U.S. President Donald Trump in his month-long bombing campaign against Iran, that relief is hard to find.

“Things are crazy right now,” said Chris Hodge, chief U.S. economist at Natixis. “I don’t know how you deploy capital with this amount of uncertainty. Nobody wants to get caught on the wrong side being too bearish when the president tweets out, ‘everything’s okay, we’re going to open up the Strait of Hormuz, the enemy is going to surrender.’”

Some of that rollercoaster ride is down to Presdient Trump’s mastery of the media, and the swift, if haphazard way his administration implements policy changes, like the day last April when Trump implemented his tariff regime. Markets react quickly to these moves, said Wendy Li, CIO at the alternative asset investment platform Ivy Invest.

“Where this term TACO has come about, is that Trump will make some dramatic statements or changes and policy shifts, and then pull back and recalibrate as necessary based on market reactions, and there’s this perception that has been generally validated by the ability to recalibrate when things have created excess volatility,” Li said in an interview. But she added, “With the war in Iran, I think we may see a different outcome.”

Right now, she said, as the president trumpets negotiations, oil prices quickly drop and stock prices rise as investors think a return to normal is in the cards. And then Iran comes back and says there are no negotiations, just an exchange of incompatible proposals. “There’s such a lack of clarity that markets are just responding very quickly to every piece of information that comes out.”

The problem, Li added, is that a war is qualitatively different from Trump’s peacetime policy switched, making this TACO trade a lot spicier.

“The expectation that things will resolve nicely and neatly, the buy-the-dip TACO mentality, is not necessarily the experience we’re going to have here, in large part because wars are unpredictable,” she said. “Someone can’t unilaterally decide to call an end to this. They can spiral out of control and last for far longer than it appears at the outset. Every week that goes by, there is an almost exponentially increased risk that we’re going to have the supply-side shock for longer, because it’s not like a flip of a switch and all this oil production comes back on.”

But the more the Administration threatens major changes, the less confidence investors and traders have that there will be a profitable bounce back from policies that are suddenly abandoned. In large part, that’s because Trump may have lost the upper hand in this conflict. As Hodge noted, it comes down to who’s really in charge: “Whatever the president says, it takes one party to start a war, it takes everybody to end it, right? So the enemy gets a vote here too.”

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Is this tech’s ‘Big Tobacco’ moment?

Two juries ruled that Meta $META and Youtube $GOOG are bad for kids this week, in California and New Mexico, when they said the social media platforms’ parent company, Meta, got young users addicted and failed to protect them from sexually explicit content, solicitation, and human trafficking. In New Mexico, the jury stuck Meta with the max fine possible, $375 million. In Los Angeles, an unidentified woman was awarded $6 million after the jury found Meta and Alphabet-owned YouTube chose to make their apps addictive, leading her and others to have significant mental health issues. The New Mexico fine is only about 1/60th of Meta’s most recent quarterly profits, but it’s the verdicts that matter. They mark the first time a social media platform has been held responsible for the content it disseminates. Dozens of similar lawsuits are proceeding in state courts, after Congress declined to regulate social media companies. Meta faces some 2,000 similar suits in Federal courts, provoking a possible avalanche of industry-changing settlements like Big Tobacco had to make in 1998.

All bets, er, predictions, are off in Nevada

State and federal officials are cracking down on Kalshi and Polymarket, the leading “prediction platforms” that dress up sports gambling and other forms of betting as federally (and loosely) regulated futures contracts. Nevada just got a court to order Kalshi that it needs a state gambling license to keep operating there, and it’s banned (for now) from offering so-called event-based contracts linked to sports, elections or entertainment. In Washington, Republican Sen. John Curtis of Utah and Dem senator Adam Schiff of California introduced a subtly-named bill called the “Prediction Markets Are Gambling Act.”

The short stack

Beautiful deals: Estee Lauder $EL, the beauty firm controlled by Trump-whisperer Ronald Lauder (he reportedly convinced Trump to try to annex Greenland) is in talks to buy high-end European beauty products company Puig for $10 billion. Estee Lauder’s brands include Clinique, M.A.C, Bobbi Brown Cosmetics and Le Labo. Family-run Puig owns Carolina Herrera, Charlotte Tilbury, Byredo and Dr. Barbara Sturm. Che bellezza!
Pistols at Dawn: It looks like a stand-off, but family-owned Italian arms maker Beretta may have more financial firepower than its target, U.S.-based Sturm, Ruger & Co. $RGR, the largest U.S. firearms maker. Beretta owns almost 10% of Ruger, and wants to take a 20% stake in the company, get more board seats and, Ruger says, combine the two firms in the near future. Beretta denies it wants to take over its more-lightly armed opponent, but Ruger says it’s sticking to its guns and won’t sell. Ruger’s stock is down 35% in the past five years.

Car talk

Tesla’s Eurobounce: After a year of falling sales, Tesla’s $TSLA European sales may be doing a 180. Tesla new-car registrations rose nearly 12% in February from 2024 to 17,664 units across Europe, despite political backlash against Musk’s support of the President Donald Trump, and rising pressure from Chinese EV-maker BYD $BYDDF. The shift to electric could speed up if the war on Iran continues and gas prices keep jumping. And in more good news for Tesla, the electric truck it calls, imaginatively, “the Semi,” seems to be a hit with truckers, the Wall Street Journal reports. Selling for about $300,000, double the cost of a diesel truck, the new rigs can go 500 miles on a charge — if you can find the high-powered charger they need. But truckers say they’re a dream to drive - no 13-gear shifting or noxious diesel fumes. Tesla plans to make 50,000 Semis a year at its Nevada plant. Tesla shares are down about 12% this year.
Uber picks Rivian: Uber $UBER picked California-based Rivian $RIVN to supply electric taxis for its debut next year in Miami and San Francisco. Uber will buy 10,000 Rivian R2 SUVs, and invest $300 million in Rivian. Uber announced a similar deal last year with Lucid $LCID for 20,000 electric robotaxis over the next six years. And Amazon’s $AMZN oddly-named Zoox electric ride-share company said it will be expanding its robotaxi service in San Francisco and Las Vegas, and start testing its custom-built driverless cars in Austin and Miami later this year. But there’s always someone who’s gonna throw shade: Honda $HMC is calling off its joint venture with Sony $SONY to make Playstation-styled self-driving EVs. The $102,900 Afeela-1 would have let users stream movies or play on their playstations while they ride, but Honda said the end of U.S. EV subsidies and a dearth of charging stations mean there’s not a big enough market for EVs in the U.S. Honda plans to take a $15.7 billion charge, for its first annual loss in decades, after ending plans for three other U.S. EVs.
Slop stop: OpenAI has killed its video content maker known as Sora, a deal with Disney $DIS that was supposed to let users make their own Disney-themed content. But just days after launching a new instruction manual on how to use Sora, the two pulled the plug. Disney’s promised $1 billion investment into OpenAI went with it. OpenAI is shifting to focus on business customers, but there’s speculation that the real trigger for the deal being called off is its Disney characters were being used in what might best be politely described as “non-family fare.”

Media mirror

This ain’t no gentle mouse: Disney $DIS thought it could relaunch its sagging “Bachelorette” franchise with a new season featuring “Secret Lives of Mormon Wives” star Taylor Frankie Paul, a divorced single mom. But then gossip site TMZ ran a video of Paul beating up on her ex, Dakota Mortensen, and now Disney’s pulled the show. It’s not clear why Disney thought a Tinder-meets-MMA show wouldn’t garner eyeballs, but Disney stands to lose about $50 million (including $35 million in ads) as it cancels the season. Utah police have been investigating Mortensen’s allegations of domestic abuse by Paul.
Good night and good luck: So how’s it going over at Paramount Skydance-owned CBS? Not so great. Chief news poobah Bari Weiss announced she’s shuttering 99-year-old CBS Radio News, claiming it just can’t make money. That’s where everyone from Edward R. Murrow to Walter Cronkite and Marvin Kalb got their starts. “It’s no secret that the news business is changing radically, and that we need to change along with it,” Weiss wrote in a note to staff, announcing the closure and layoffs of 6% of CBS News staff. The news network was carried on about 700 affiliated radio stations. Meanwhile, media newsletter Status got its hands on some viewership data for CBS, learning that under Weiss, CBS’ flagship Evening News show is headed to its lowest-rated first quarter of the century in both total viewers and the coveted 25-54 demographic. The Larry and David Ellison-controlled Paramount $PSKY, which has lost half its value in the last six months, is poised to buy Warner Bros. Discovery $WBD , and with it control of CNN.
Monopoly, shmonopoly: Nexstar Media Group $NXST got both the Dept of Justice and the FCC to approve its $6.2 billion takeover of Tegna, the TV station group of the former Gannett newspaper chain. State attorneys general and satellite broadcaster DIRECTV are still suing to block the consolidation, which they argue reduces viewer choice and violates decades old media ownership rules meant to protect a diversity of opinions. The new group will have 260 local broadcast stations. Local stations are facing economic pressure from cable, streaming and smart phones, and say the need to merge to survive. Opponents of the deal say local affiliate stations are still massive profit-makers. Nexstar CEO Perry Sook expressed his gratitude in a statement: “We are grateful to President Trump, [FCC] Chairman Carr, and the DOJ for recognizing the dynamic forces shaping the media landscape,” Sook said.
High Flyers: Check-in chaos may be making air travel a nightmare for many Americans as the fight over funding ICE drags in sister Homeland Security agency TSA, the friendly folks who make you take your shoes off before you can buy that $8 Starbucks drip at the gate. But one company is thriving: Clear Secure $YOU, whose Clear app pre-screens premium paying customers helping them avoid long security lines at the airport. Its shares are up 15% in the past month, and have doubled in the past year. Members of Congress might want to sign up for it: Delta $DAL has just announced no more white-glove treatment for senators and congressmembers at U.S. airports, at least until TSA gets its funding back. Once they get to the gate, lawmakers (and ordinary passengers) may find fewer reasonably priced coach-class seats, as airlines add premium capacity, because, well, that’s where the profits are. United $UAL says it will add 44 Boeing $BA 787-9s over the next two years, most of them with additional premium seats, along with 68 Airbus 321s that have lay-flat seats in business class. Since 2020, the number of business and first-class seats on domestic flights has risen 27%, while the number of economy seats is up just 10%.

Elon’s World

Fraud case: Remember when Elon Musk tried to wriggle out of buying Twitter back 2022? He suddenly started talking down the company, saying the feeds were riddled with bots, and it wasn’t worth the money he was offering? Well, a federal jury in California ruled that he owes $2.5 billion to former Twitter shareholders who sold on the dip Musk’s tweets caused, and lost out when he finally yielded to pressure from courts and shareholders, and agreed to buy Twitter after all. The former shareholders said Musk’s goal was to “trash Twitter with his personal megaphone — his Twitter account — punish the stock, and try to renegotiate.” In the end he paid $44 billion for Twitter. But the jury didn’t hold Musk liable for deliberately trying to drive down the share price. The trial produced some gems: “If this was a trial about whether I made stupid tweets, I would say I’m guilty,” Musk testified. Musk won a similar suit in 2023 over investor losses when he tweeted that he had “funding secured” to take Tesla $TSLA private. He didn’t.

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