U.S. President Donald Trump's longtime teleprompter operator allegedly made more than $100,000 trading contracts on Trump's word choices at prediction market operator Kalshi, ABC News reports, citing federal investigators.
Key Takeaways
- Perez, who was with Trump during his first term, was promoted for Trump’s second stint in office.
- Investigators repotedly found Gabriel Perez would back out of contracts mid-speech after Trump skipped speech sections.
- The CFTC is said to be willing to close the matter without criminal penalties.
Gabriel Perez, a technical assistant to the President, has worked with Trump since 2016. His official title is deputy assistant, which is a promotion from his “special assistant” designation during Trump’s first presidential term.
Perez's position gave him access to final copies of most of Trump's speeches, as well as remarks from other officials, before they were delivered, per ABC News. Federal investigators reportedly believe that access enabled him to profit from predicting Trump's remarks.
A White House spokesperson said Perez is cooperating with investigators from the Commodity Futures Trading Commission (CFTC).
“The White House has strict ethics guidelines that we expect all staffers and officials to follow,” spokesperson Davis Ingle said after being reached by ABC News. “The staffer in question is fully cooperating with the CFTC.”
Sources told ABC News that Kalshi alerted the CFTC to the situation after it detected suspicious activity in its Mentions market.
Contracts traded here settle based on whether an individual mentions specific words during a speech, commentary, or event - For presidential speeches, contracts could focus on words such as “Iran,” against whom Trump is leading an armed conflict, “Biden,” his predecessor in the Oval Office, or “Coke,” his favorite drink, along with a plethora of additional options.
“Our surveillance team promptly flagged and referred these trades to the CFTC, and we are cooperating and assisting regulators," Kalshi's lead lawyer said in a statement to ABC News.
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How the alleged scheme unfolded
CFTC investigators reportedly allege Perez purchased more than a dozen contracts in mention prediction markets related to Trump speeches at the World Economic Forum in Switzerland, the State of the Union, and a Medal of Honor ceremony, all during a three-month window. The latest of those occurred in March.
Shortly after the Medal of Honor ceremony, the White House sent an internal memo warning its staff about using inside information to win money at prediction market sites, sources told ABC News.
Perez is said to be frequently informed of last-minute edits to speeches by Trump himself. He came under scrutiny for that access after the riot at the Capitol on Jan. 6, 2021, after which investigators wanted to discern what Trump had changed in his speech before it was loaded into the teleprompter.
Trump is also famous for going off-script during his speeches. Investigators reportedly located several instances in which Perez sold his positions mid-speech after Trump skipped a portion of a speech that contained words Perez had predicted he would mention.
No criminal charges expected
Federal prosecutors in Manhattan declined to open a criminal investigation after they were informed of the allegations against Perez, a source told ABC News.
CFTC regulators are also reportedly willing to settle with Perez without further intervention. Proposed terms would require the teleprompter operator to return the funds he won and face a ban from making similar trades in the future.
This is the second time that the State of the Union has played a part in a prediction market scandal. Former politician George Santos was accused of promoting his own attendance at the event, only to later back out so he would win money by predicting that he would not show up. Santos denied the accusations.
Insider trading has also been a major issue for prediction market operators and regulatory officials. Kalshi, Polymarket, and other top operators ban the practice, while a new proposal from a House committee would ban lawmakers from using prediction markets.
