Jay Clayton said regulators would likely investigate the unusual surge in trading activity early Monday that preceded a market-moving social media post from President Donald Trump.
“Any move like this before an announcement is something regulators will look at,” Clayton, a former Securities and Exchange Commission chairman, said on CNBC’s “Squawk Box” Wednesday, referring to the surge in futures trading minutes before Trump announced that the U.S. and Iran had held talks and that planned attacks on Iranian infrastructure would be halted.
Clayton, now U.S. attorney for the Southern District of New York, said authorities were working to reconstruct the activity and identify participants in all markets.
“They will go back and track everything and everyone,” he said.
The SEC declined to comment.
Clayton noted that regulators have the most transparency in cash stocks, where trading data allows for detailed analysis of who bought and sold securities and when. Monitoring in other areas, including futures and commodities markets, may be more complex and less comprehensive.
“I always tell people our best watch is the cash equity markets – we can track them,” Clayton said. “It’s a little more difficult in the commodity markets and others.”
The comments come after a sharp increase in trading volume in the S&P 500 and oil futures around 6:50 a.m. New York time, about 15 minutes before Trump’s post helped boost stock markets and push oil prices lower.
“There is a point here where Congress should act — let’s be clear about that broadly,” he said. “The law is not as clear as it should be. … There are a lot of people who say that’s OK. I don’t feel like it’s OK.”
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