The Senate Banking Committee’s senior Democrat, Sen. Elizabeth Warren, questioned Treasury Secretary Scott Bessent on Friday about why he provided Wall Street insiders with “inside information” about President Donald Trump’s tariff plans rather than the general public.
Bessent stated that the tariff dispute between the United States and China would soon de-escalate during a closed-door, invitation-only event held by JPMorgan Chase (JPM) on Tuesday. Stock prices skyrocketed once news of his comments reached the media. After then, Trump addressed reporters, thereby endorsing Bessent’s statements.
Warren expressed her concern in a letter to Bessent on Friday that Bessent gave “a room full of wealthy investors and Wall Street executives exclusive, advance tips about the Administration’s trade policy, potentially creating the opportunity for insider trading or other financial profiteering by well-connected friends of the Administration.”
Warren pointed out that Fox Business Network reporter Charlie Gasparino tweeted Thursday that the Trump administration was warning Wall Street CEOs that a trade agreement with India was almost final.
Trump’s “opaque decision-making on tariffs and frequent, seemingly random changes of course” appear to be designed to give investors with strong ties to the government access to information before the general public gets, according to Warren.
According to her, they can then time the market using this inside knowledge. Warren requested that the Treasury secretary respond by May 8.
There was no response from the Treasury Department.
Senate Democrats were already worried that Trump supporters may have had advance notification of presidential choices before Bessent’s speech at the JPMorgan event.
Prior to the unexpected 90-day halt on his sweeping tariffs, six Democrats, including Warren and Minority Leader Chuck Schumer, wrote to the Securities and Exchange Commission’s chair on April 11 asking him to look into whether Trump, any of his cabinet members, or any of his allies engaged in insider trading.
Democrats have not presented any proof that the president or any of his associates engaged in unlawful or unethical transactions.
However, the incident has spurred a wider debate about trading regulations and their ability to stop presidents’ cronies and White House personnel from making money off of insider information.
Like everyone else, the president and vice president are prohibited from engaging in insider trading.
According to Indiana University Maurer School of Law insider-trading law expert Donna Nagy, being aware of the tariff suspension may qualify as substantial nonpublic information.
Experts stated that Bessent did not break any laws in this instance and that the traditions and practices surrounding such private discussions are unclear.
To prevent the impression of a conflict of interest, Treasury officials used to frequently try to ensure that events were accessible to the media.
Watchdog group Revolving Door Project executive director Jeff Hauser stated that Bessent could have chosen “any number of forums where he could have sent the exact same signal to markets and done so without benefiting the clients of any specific bank.”
According to him, the Treasury Department ought to follow the Federal Reserve’s guidelines, which include providing a livestream of public remarks by the central bank chair and its governors as well as early notification of such events.
