Commodity Futures Trading Commission Chairman Michael Selig told Congress the agency is cracking down on insider trading, amid mounting concerns over potential misuse of non-public information in oil, equity and prediction markets.
Speaking at a US House Committee on Agriculture oversight hearing on 16 April, Selig warned: “I want to be crystal clear. To anyone who engages in fraud, manipulation or insider trading in any of our markets: we will find you, and you will face the full force of the law.”
The remarks came as media reports said the CFTC is investigating a series of well-timed, lucrative oil futures trades placed shortly before President Donald Trump shifted policy on Iran, raising concerns over potential misuse of non-public information.
The hearing – Selig’s first congressional testimony as chairman – underscored the political sensitivity of markets tied to real-world events. Lawmakers questioned whether the CFTC is equipped to police traditional markets as well as newer products such as prediction contracts.
House Agriculture Committee Chairman Glenn Thompson said lawmakers are prepared to consider legislative changes if the CFTC’s authority proves insufficient, but stressed the committee first needs clarity on whether any gaps exist.
Policing markets
Selig emphasised that enforcement remains central to the agency’s mandate, echoing recent comments by CFTC enforcement director David Miller that insider trading and market manipulation are top priorities.
Pressed on how the CFTC polices newer markets such as prediction contracts – which critics have likened to state-regulated gambling – Selig outlined a layered oversight model rooted in the Commodity Exchange Act.
Exchanges act as the “first line of defence”, operating as self-regulatory organisations that monitor trading, detect abusive practices and certify that listed contracts are not readily susceptible to manipulation.
“The Commodity Exchange Act sets forth a regulatory scheme where the exchanges are the first line of defence,” Selig said. “The CFTC is the second line.”
The agency conducts its own surveillance, reviews exchange activity and evaluates contract self-certifications, with authority to reject products if needed, he said. It also works alongside exchanges and, where appropriate, law enforcement agencies to investigate potential misconduct.
“We have a zero-tolerance policy when it comes to fraud, insider trading and manipulation in our markets, and we are actively policing and surveilling these markets,” Selig said. “We are a cop on the beat and will continue to be.”
While declining to provide precise figures, Selig said the agency is handling “many, many” active investigations – ranging from hundreds to potentially thousands.
“I can’t speak to the specific number, but we are constantly receiving tips and responding to them, while making sure we are protecting our markets,” he said.
Resource constraints
Lawmakers also questioned whether the CFTC can effectively oversee a widening set of markets with a smaller workforce. The agency currently employs 543 full-time staff, down more than 20% from 708 at the end of fiscal 2024.
Selig said the agency is operating more efficiently, pointing to investments in automation, artificial intelligence and enhanced surveillance systems designed to detect suspicious trading patterns more quickly.
Even so, he said additional funding remains “absolutely critical”. The CFTC has requested $410 million for fiscal 2027, a 12% increase, and plans to expand staffing to 650 employees as it takes on a larger role in digital asset oversight.
The hearing also highlighted an unusual governance structure at the CFTC: Selig is the agency’s sole commissioner, with four seats vacant on a typically five-member commission.
Lawmakers questioned whether rulemaking could proceed without a full commission in place, particularly as the agency’s role evolves rapidly. Selig said halting regulatory work was not an option.
“We cannot, for the sake of the American people, slow down in our rulemaking,” he said. “It’s very important that we get investor protections, consumer protections and safeguards for our markets.”
SEC harmonisation
Speaking about the recent SEC-CFTC memorandum of understanding to guide cooperation between the two agencies, Selig underscored the importance of maintaining distinct mandates, with the SEC focused on capital markets and the CFTC on risk management.
“It’s very important that we keep the two agencies distinct, but it’s important that they work well together and that they have the ability to harmonise rule sets. We don't want to duplicatively regulate our market participants,” he said.
The push for closer coordination comes as digital assets increasingly blur traditional regulatory boundaries. The SEC and CFTC have both faced criticism in recent years for regulatory overlap and uncertainty, particularly around which agency has authority over specific digital assets and trading venues.
CLARITY Act
Selig also addressed the CLARITY Act, a bill that would establish a formal framework for digital assets, giving the CFTC jurisdiction over digital commodities and spot markets while preserving the SEC’s oversight of securities. The bill is nearing the final stages in Congress.
He said the legislation would provide the CFTC with the authority it needs to oversee spot markets and register new market participants.
“Everything that I’ve seen to date … has been excellent and really provides the agency with the authority it needs to comprehensively regulate these markets,” he said.
Selig warned, however, that delays in passing the legislation could leave investors exposed.
“I do believe there’s a sense of urgency. It’s absolutely vital that we have clarity, certainty and investor protections for these markets,” he said. “Every day we delay is putting American investors and consumers at risk.”
24/7 debate
The hearing also raised the prospect of round-the-clock trading and clearing, a model that has gained traction in crypto markets but remains contentious in traditional derivatives.
Selig cautioned against applying a uniform approach across asset classes, citing concerns from agricultural producers about operational and risk-management challenges.
“Many farmers, ranchers and producers are concerned that they’re going to have to trade on a 24/7 basis, monitor the markets all night, and that this also means 24/7 risk management. These are considerations we are taking into account. We previously sought input on these issues and will consider those comments,” he said. “It may work for crypto, but not for other things.”
Watch a recording of the hearing here.
