Massachusetts Democratic Senator Elizabeth Warren, a former Harvard professor and defender of consumer rights in the financial markets, has asked various federal agencies to start investigating possible insider trading violations by President Donald Trump.
Warren, along with Democratic Senators Ron Wyden of Oregon and Michael Bennet of Colorado, sent letters to three different federal agencies as well as the White House Council of Economic Advisers (CEA).
The Democratic senators are most concerned about Trump’s actions and communications after he received confidential and highly secret information about the May jobs report which was released on June 1.
They have asked for a broad investigation that will look at whether or not Trump acted in violation of strict federal trading laws. It is also believed that he violated established protocols of the executive branch.
The senators’ requests were sent to the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). According to the senators, these watchdog agencies (which are responsible for the integrity of the financial markets) must investigate whether Trump or anyone else in the White House improperly revealed information about the jobs report that led to actual criminal insider trading.
Warren, who is a possible 2020 presidential candidate, wrote:
“President Trump recklessly violated federal rules and years of precedent by telegraphing financial data that has the power to move our markets. The [Bureau of Labor Statistics] and the CEA should examine what went wrong here — and the SEC and CFTC should investigate to make sure that no one obtained and used non-public information to feather their own nest.”
An hour before the secret jobs report was released to the public Trump sent a tweet saying there was good news in the report. Such information always affects stock prices on Wall Street, and advance knowledge could be used for illicit financial gain.
At 7:21 a.m. that day Trump tweeted that he was “looking forward to seeing the employment numbers at 8:30 this morning.”
The Bureau of Labor Statistics (BLS) released the jobs data on schedule at 8:30 a.m., showing the economy added 223,000 jobs and that the unemployment rate fell to 3.8 percent. The information is highly classified and handled via encrypted networks.
By law, federal workers must not comment on the jobs report until an hour after it has been released.
Warren, Wyden and Bennet on Friday sent several letters asking for information on how sensitive information like the jobs report is handled in the White House. They also asked if there was unusual market activity before the report was released Friday which would be evidence of inside, advance knowledge.
Warren, Wyden and Bennet said they had grave concerns that the president and/or someone else in the White House had tipped off someone about the jobs data.
The senators also asked SEC and CFTC whether they had evidence of any unusual trades in the 24 hours before the jobs report was released.
“Trump was reckless and irresponsible enough to disclose this information ahead of time, stacking the deck in favor of hedge funds and high-speed traders,” Wyden said. “We must determine the extent of the president’s leaking, its impact on the financial markets and whether Trump’s friends benefitted from it.”
“Economic data is made public at a specific time on a specific day to prevent market manipulation,” Bennet said. “With hundreds of billions of dollars at stake, we need to determine if the President’s inappropriate disclosure of highly sensitive information is an isolated incident or representative of a broader trend.”