Jay Clayton said regulators are likely to investigate an unusual spike in trading activity early Monday ahead of President Donald Trump’s market-moving social media posts.
“If there’s a move like that in advance of any announcement, that’s something that regulators will look at,” Creighton, the former Securities and Exchange Commission chairman, said on CNBC’s “Squawk Box” on Wednesday, noting that futures trading spiked minutes before President Trump announced that the U.S. and Iran were in talks and plans to attack Iranian infrastructure were being halted.
Clayton, now the U.S. attorney for the Southern District of New York, said authorities will work to restructure the operation and identify participants across the market.
“They’re going to go back and track everything, folks,” he said.
The SEC declined to comment.
Clayton noted that regulators have the most visibility into physical stocks, and transaction data allows detailed analysis of who bought and sold securities and when. Monitoring in other areas, such as futures and commodity markets, may be more complex and less comprehensive.
“I always tell people that the best oversight is in the physical stock market. For example, you can track it,” Clayton said. “For commodity markets and other markets, it’s a little more difficult.”
The comments came as trading volume in the S&P 500 and oil futures surged around 6:50 a.m. New York time, about 15 minutes before Mr. Trump’s post led to a rally in the stock market and oil prices.
“There is something here that Congress needs to act on. Let’s make that clear across the board.” “The law is not that clear… There are a lot of people who say this is OK. I don’t think it’s OK.”
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