This is wrong. It's not insider trading. Lutnick didn't have inside information. His son just had a brain. Anyone who read the case knew which way the court was going, it was the least surprising decision ever. Perhaps the only surprising thing is that the court ever heard it.
He presumably did not have access to the court's opinion before it was released, but he did have access to internal White House legal opinions before the tariffs were announced ("Mr. President this is illegal and very likely to be overturned by the courts"), and he obviously had access to the entire federal legal team during the court cases.
I can't prove that there was any White House advisory memo before the tariffs were announced, but hypothetically, would this not be considered material nonpublic information? It seems the same as a corporate insider dumping stock because a company lawyer privately told them "we're definitely going to lose this case".
>I can't prove that there was any White House advisory memo before the tariffs were announced, but hypothetically, would this not be considered material nonpublic information?
Was the hypothetical "White House advisory memo" produced using any proprietary information? If not, why should it be any different than if I hired a bunch of top lawyers to produce a private report for me?
Because this hypothetical memo was paid for by our tax dollars, not your own private money! That means it belongs to the American people, not individuals for their private gain. Using it for your own gain would be theft from the American public.
In this hypothetical case, of course. There is no evidence that such a memo exists. But if it did...
> That means it belongs to the American people, not individuals for their private gain.
This is a strong case that there ought not to be any such thing as a secret opinion or confidential advice from the White House OLC - and I agree with that opinion if that's what you're saying.
But it doesn't transform the information contained therein to nonpublic.
I'm not saying this whole thing wasn't a total scumbag move - it was - but it's not quite the same crime as insider trading.
> But it doesn't transform the information contained therein to nonpublic.
The legal opinion itself was non public? If they couldn't use that they would first have to put up the money to pay the legal fees to find out how likely their bet was to pay off.
And just to put this in writing too, I would be shocked if we don't find out later that a lot of the volatility was a way for a few people to make a lot of money. You can make a lot of money when there's more volatility. So all the flip flopping on tariffs yes/no might very well be manipulating markets...
Not saying you're wrong, but note that in general attorney-client privilege is kind of important as well.
A travesty, to be sure, but not insider trading.
Yes, because it was produced by the same people that are going to argue the case in court. You can hire the best lawyers in the world but they will still have to speculate on what arguments the government is going to make, and whether there are confidential communications showing evidence that there was some consistent rational justification for the tariffs and not just the president's public posts that leader X was mean to him on the phone so he imposed a tariff.
What a week argument - your still making excuses for this nonsense. Ridiculous.
So a Whitehouse insider is going to get a bunch of tarrif refund money?
Not just a Whitehouse insider, the guy actively doing the policy he was probably being advised was illegal and would be overturned.
And also probably one of the guys most pushing for this policy which was probably advised would likely be overturned.
Tariff policy is ultimately implemented by the Secretary of Commerce. This isn't some random other staffer in the Whitehouse that heard these policies wouldn't go, it was the guy actively doing it likely stands to make significant financial gains for his actions being found to be illegal.
The level of corruption on that is just absolutely mindblowing.
You’re piling speculation on speculation. First of all, there was no such memo saying the tariffs were “very likely to be overturned.” The Supreme Court decision was 7-3, with two Bush appointees voting to uphold the tariffs. The appellate court decision was 7-4, with two Obama appointees and two Bush appointees dissenting. Second of all, there is no evidence that this legal analysis was leaked to Cantor.
Who cares? The Treasury Secretary shouldn't have family profiting off fixing illegal policy the Treasury Secretary enacted. That should never happen. It is wrong, it doesn't explicitly spelled out.
Commerce* Secretary. Lutnick is the Secretary of Commerce which implements tariff policy. Bessent is the Treasury Secretary.
The two answers I'm hearing to my question so far are that either this decision was so obvious that anyone could have predicted it without insider information, or that this was a split decision that the administration could not have predicted ahead of time.
You're right that maybe there never was any internal memo, just thought this was funny.
Wait...how do we know there was no such memo?
We have no reason to believe that if such a memo exists it was used improperly, but I don't see how we could know there is no such memo.
BTW you've got an extra Justice on the Supreme Court. Should be 6-3, not 7-3.
> but I don't see how we could know there is no such memo.
There was no such memo because OLC isn’t full of dummies. Maybe the talking heads on CNN said the case against the tariffs was a slam dunk, but you don’t get split courts at multiple levels for cases that are slam dunks.
>but he did have access to internal White House legal opinions before the tariffs were announced
yes but the opinion that it was illegal was the received wisdom by everybody with any sort of legal expertise in the subject. It would have been completely insane if the white house staff didn't believe the same. So I guess I'm actually surprised at the white house staff believing what everybody else did?
> yes but the opinion that it was illegal was the received wisdom by everybody with any sort of legal expertise in the subject
That isn’t true and you should really question whatever news source told you that. Putting aside that it was 6-3 in the Supreme Court. It was a 7-4 decision in the en banc Federal Circuit, with two Obama appointees voting in favor of upholding the tariffs. The lower appellate court opinions amounted to 127 pages: https://www.cafc.uscourts.gov/opinions-orders/25-1812.OPINIO....
You don’t get cross-party splits like that on issues where “everybody with any sort of legal expertise in the subject” agrees. If anyone with legal expertise was telling you that this issue was simple, they’re probably not very good at their job.
White House legal opinions aren't any better than other legal opinions. Opinions are not "information".
I understand your position but I disagree. If I were trying to predict whether the government is going to win in court, I think reading what the government's own lawyers think about the case would be valuable. If it were possible to pay for this I think people would, that's why I think it is material. Some random person's opinion is not relevant information, but the opinion of people directly involved in a case is.
That's fine, to each their own on trying to make predictions. I did try to predict it, did it accurately (along with many others, this wasn't the hardest thing ever), and wouldn't have had any interest in any internal memo.
It's a public arena on things like this. I don't think even the justices themselves have "material inside information" until a little ways through the hearing, and people are trying to predict the outcome well before that. On the surface that might sound absurd, but it isn't.
Yes it absolutely is valuable to have access to expert opinions and people do pay money to acquire opinions from experts.
But expert advice, even if material, is not the same as insider information.
Well, I think context matters here a lot:
If you go to a random lawyer in Wyoming and ask them to write "expert opinion" then what you'll get would probably be something standard, written by a junior associate, or maybe even produced by ChatGPT.
If the White House orders "expert opinion" on potential Supreme Court ruling then the chances are that the expert asked to prepare it is someone who plays golf with some of the SCOTUS judges.
So those two "expert opinions" might not bear the same weight.
The quality of an opinion has no bearing as to whether that opinion is insider information.
Is a lawyer working on a case allowed to short the stock of his client?
Why not?
(Hint: it creates a perverse incentive to see your side lose the legal argument for your own personal gain.)
And in this case, it's the actual secretary doing it. Who has significant influence on the outcome of the case (largely in the negative - nothing he can do can make the government more likely to win it, but stuff he did has the capacity to make the government more likely to lose it.)
The non-publicly known strategy they intend to use in court is “information”
The Lebowski conjecture.
Prediction markets already had it as more likely than not that the court would rule against the tariffs
In the business, even the appearance of impropriety is damaging. People who work in finance aren't allowed to trade the same stocks as their company is trading, whether they have any inside info or not. The assumption is that simply by being close to a source of information, you are compromised. The same restrictions should apply to those close to government. By being family, he is compromised by default.
Wrong. People who work in finance (I spent years there) are allowed to trade stocks their company is trading. There is a process to get approval. The equities division at an IB might be trading every single name in the S&P500. If you sit in the investment banking division and that division isn't doing anything related to a name, you are likely to get approval.
In this case, the idea that Cantor can't do something because the former head is now in a government job is crazy. No one "in the business" thinks Cantor is suddenly hobbled.
Oh - so the kid went out and he got permission to do this?
Where is that? Who approved his request?
> In this case, the idea that Cantor can't do something because the former head is now in a government job is crazy. No one "in the business" thinks Cantor is suddenly hobbled.
That's not the idea, and it almost seems like a straw man to be honest. The actual idea is that the current head of Cantor can't do something because he's a direct relative of a high ranking government official whose powers and job duties present a conflict of interest for this specific set of transactions.
Cantor Fitzgerald is an investment bank. Rather than claim a straw man, think about what they do and how it interacts with the administration. Everything they do is heavily regulated. If they couldn't do anything that gave an appearance of a conflict, they literally couldn't do a single thing that makes up their business and would be hobbled.
I think a lot of people feel like people who have one foot in a heavy regulated industry shouldn't have their other foot in the regulatory body that regulates that industry.
> If they couldn't do anything that gave an appearance of a conflict
This time I won't say maybe - that's a straw man.
I never said Cantor shouldn't be able to do anything that even gives the appearance of a conflict. Or anything even close to that really.
As you said yourself further up the thread, investments of investment bank employees are highly regulated. And not only employees themselves, but also their immediate family members.
Yet that same level of legal regulation doesn't apply to immediate relatives of government officials. We've seen frequently with spouses and children of congressmen, and now we're seeing it with the son of a cabinet member. Yes, this may technically be legal, but legal does not equate to just and desirable. This reads to me like a serious loophole in the law that needs to be closed.
You are just out of your depth in this area. You don't understand what Cantor has done here, you don't understand what Howard can or cannot do in his role.
Howard Lutnick's positions have been directly opposite of what Cantor has bet will happen. Cantor has 10 or 12 thousand employees and is constantly doing all manner of things. Howard has no power over the supreme court. His son is the chairman, he's miles away from being in the weeds on what specific things they do. He isn't going to be comped like crazy as the chairman.
There is no conflict. There is only the appearance of one and it only appears that way to people who don't understand the situation.
> Rather than claim a straw man, think about what they do and how it interacts with the administration.
Uh, essentially betting against a policy your former head put in place isn't a typical thing?
You would absolutely steer clear of this. There's plenty of other things they could be doing, no?
Just to make the point. This is such a typical thing investment banks do, that (especially) they are the ones doing it and nobody else?
It's an investment bank. They have a million things going on, sometimes counter to each other.
Almost all companies issuing stock to employees also ban them and their family members and fellow house residents from trading in the same stock to avoid insider style improprieties and the SEC has frequently prosecuted such cases. Wild that congress and WH staff have zero such restrictions even in 2026!
Nope, wrong. Most companies have black out dates around earnings releases. Otherwise, good to go.
(and/or have an explicit approval workflow that effectively does the above).
> In the business, even the appearance of impropriety is damaging.
It was damaging.
In 2015.
And then for a bit between 2021 and 2024.
Now it's not again.
You have to enforce these sorts of gentlemen's agreements. Just saying "it's damaging" isn't enough to actually make it damaging.
>People who work in finance aren't allowed to trade the same stocks as their company is trading, whether they have any inside info or not
But the supreme court is a separate branch of government from the executive, so the analogy doesn't really hold. To claim otherwise would require Lutnick playing some 4d chess where he's publicly pro tariffs, but secretly anti-tariffs and was sandbagging the government's legal defense (can he even do that?), all the while not tipping Trump or the MAGA base off for being disloyal.
> It's not insider trading.
One might argue it should fall under a different technical label, but whatever label one uses (A) it stinks of corruption and (B) it's only the tip of the iceberg.
People entrusted with government authority to do work for the public shouldn't be personally profiting from how they decide to wield that authority. Imagine a policeman that arrests people while placing bets about how long that person will be jailed, what they'll be charged with, or whether they'll be convicted.
The objection that "it's unfair, they know something other bettors don't" occurs first not because it's the biggest issue, but because it's easier to prove.
The bigger problem is making improper decisions with their work-powers in order to personally profit, a trust and separation which they've already destroyed by placing the bets in the first place.
is it not a conflict of interest if you facilitate the legislation of tarrifs that you knew are illegal?
>if you facilitate the legislation of tarrifs that you knew are illegal?
Did they know it was illegal? Any more than say, the Biden administration "knew" that forgiving student loans were illegal?
They literally spent a decent chunk of money spinning up a line of business that could only make money if the tariffs were illegal.
> Did they know it was illegal
it doesnt have to be black and white. they knew enough to spin up a business that when it is overturned they could make money... which means they knew the probability was high.
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Insurance company deal: if you pay us $X now, and then Y happens, we will make you whole, even though that cost may very well exceed $X.
Lutnick deal: we pay you $X' now, and if Y' happens, we collect everything which will substantively exceed $X'.
This is not insurance, its closer to shorting stocks.
Oh, one other thing: the insurance company has essentially nothing to do with Y at all, in the sense that they have no control over Y and generally speaking no involvement in it (think: accidents, floods, storms, fires). By contrast Lutnick is the Secretary of Commerce of the United States of America.
Lutnick deal: if we pay you $X now, and then Y happens, you will make us the whole refund, even though that windfall may very well exceed $X.
Insurance company deal: you pay us $X' now, and if Y' happens, we pay for everything which may substantively exceed $X'.
I have no idea what the point of this is, since it just restates what I wrote, and reinforces the point that the Lutnick deal is nothing like "insurance".
They are the same. If you don’t get it then I’m not sure I can help you further
even if they were not sure 100%, the fact that introducing the legislation is connected to him making money is a conflict of interest.
That's not really the comparable here, you need to find a person with vested interest in the outcome of the student loan forgiveness program.* Someone that was working within the agency responsible for the program and actively was in the discussions where the legality was discussed. Then made a scheme to financially get rewarded. Not only that used his son as a way to create the illusion of separation.
* And not just a borrower that wouldn't be anywhere similar to this level of conflict.
No, it's not a conflict of interest. It's perhaps dumb, or morally bad, or several other things.
> dumb, or morally bad
This is easy to say in hindsight. There was a non-zero chance the decision could have went the other way. Also, companies aren't stupid. They don't buy insurance against things that are impossible.
And the supreme court doesn't hear cases that are 100% obviously illegal.
It was non-zero but close to zero.
Companies don't want to deal with the headache for many things. It's not a given over what time horizon and how much work is involved to get the refund. It's totally sensible to sell the claim for 70 cents on the dollar for example.
The supreme court absolutely hears cases that are obvious. They do it for several reasons - to create clarity, to narrow scope, to set a very clear precedent, and other reasons.
It wasn’t “close to zero.” The Supreme Court split 6-3, with two Trump appointees voting against him. And the Federal Circuit, which is the most boring appellate court and not political at all, split 7-4, with two democratic appointees and two republican appointees voting to uphold the tariffs.
This was a case that split both the liberal and conservative blocs. Obama’s former SG, Neal Katyal, went up there and argued for limiting presidential power over the economy. One of the justices quipped about the irony of Katyal’s major contribution to jurisprudence being revitalization of non-delegation doctrine, which has always been a conservative focus.
Did you read the ruling? Read Clarence Thomas's dissent. It's not clear if he actually thinks what he wrote, or he just voted that way so he could write a dissent and make a strange legal point which probably doesn't carry water but sort of maybe could one day maybe.
If it were close, I think he would have voted the other way. The folks on the court appear extremely inclined to take the other side on things just as a mental exercise, or to be able to write something on the record that they find interesting.
It was close to zero.
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Yes, I read them all.
And, surely you understand that many see using the due process clause to make his argument was a stretch. Just saying "his analysis is extremely cogent" doesn't make it so.
I think the issue is that someone working in public office had influence to affect that probability, and their relatives stood to gain from it.
I don’t know enough about the ethics laws to know if it was strictly illegal, but it does create a smell.
Suppose a county engineer has influence on whether oil drilling will be allowed (they don’t make policy but consult those who do), and prior to approval their relatives buy up a lot of land in the area. That engineer may not have been the deciding factor, but it seems like it runs afoul of ethics laws/standards.
They weren't buying insurance. There's no insurance payout for the companies. They got a small amount of money in hand, and lost the chance to reclaim any of the tariff refund. That isn't insurance.
Also, the SCOTUS is not a criminal court, it is a constitutional court. If a case is heard there, both sides have not agreed on "obvious illegality". That is unsuprising since in general one side (in this case, the administrative branch of the US Government) is being accused of illegal behavior - when it comes to constitutional rather than criminal questions, most parties do not just accept their guilt, but push as far as they can towards exoneration.
Frequently, however to everybody else, the case concerns obvious illegality.
I agree, it's like "reverse insurance". I'm not sure what is the name.
In insurance, you pay [-$10] to avoid a potencial negative risk [-$100].
Here you get money [+$10] instead of waiting for a potencial positive benefit [+$100].
Very slightly related https://en.wikipedia.org/wiki/Reverse_mortgage
The term you're looking for is 'instant gratification'.
> And the supreme court doesn't hear cases that are 100% obviously illegal.
There is an argument in about two months' time as to whether or not the Birthright Citizenship clause of the 14th Amendment actually guarantees birthright citizenship in the US. There is no serious legal argument in favor of the interpretation being advanced by the Trump administration, that it does not. And yet here we are.
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You're upsetting the kind of people who leave their shopping carts in the parking lot instead of putting them away when they're done.
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What’s happening is that the deal stinks, and people aren’t precisely analyzing exactly why it stinks so they’re just using it to confirm their priors.
The deal stinks because Cantor bet against the administration that its former head is a part of, and against the signature policy of the president its former head serves.
Cool! How much money did you yourself make on this (given that it was entirely obvious, and not leveraging knowledge seems silly)?
A lot. If you remember all the tariff announcements in the first months of 2025, the stock market tanked and it was an easy buy. The market then reasonably quickly realized many of these tariffs weren't going to persist. The payoff was fast, and the reason you didn't see a massive uptick in the market when the ruling came out was because it was already priced in at that point.
Just because something isn't obvious to you, it doesn't mean it wasn't obvious to a lot of people.
To buy after a market dip requires roughly zero specific conviction or insight regarding this supreme court ruling and its consequences.
If the market dip is directly caused by X, and you think X is going away or misunderstood, it's specific conviction.
In this case X was the tariffs. You are out of your depth.
Why would you assume the parent would have both a betting addiction and enough side money available to make it worthwhile?
It actually wasn't the worst assumption ever...
> This is wrong. It's not insider trading. Lutnick didn't have inside information. His son just had a brain. Anyone who read the case knew which way the court was going, it was the least surprising decision ever. Perhaps the only surprising thing is that the court ever heard it.
If this was so obvious, wouldn't there have been more competitors pushing down the value of it?
Think about how to actually pull this trade off. It isn't pushing a button on your trading app. Competitors cant enter this competition easily.
I thought his son just had a brain?
And a small army of folks to do his bidding. Cantor has over 10k people, he's the chairman.
The people selling the debt thought there was a ~ 20% chance the money would be collected.
Is there any proof he didn't have insider information? With this administration + court, it's rare when some sort of fraud, bribes, or protection money payments aren't at play.
Prediction markets were at something like 60% that the court would rule against the tariffs
Technically it might not be "insider trading" since most information (we assume) was public knowledge.
But members of the government being able to trade on matters of government policy is exactly how government corruption works. Previous administrations understood this was important to prevent (Carter putting his peanut farm in a blind trust, the Bush's did the same) but now Trump has made clear corruption is just totally fine (why else become president or a government official).
It's not insider trading, but surely it's a conflict of interesting? If you ignore all the specific name calling, isn't it still quite wrong that one minister can financially bet against the administration?
> isn't it still quite wrong that one minister can financially bet against the administration?
Why?
Because it encourages him to work against the administration.
Could this open Cantor Fitzgerald up to class action law suits from consumers who ultimately paid the refunded tariffs?
I'd imagine it'd open the federal government to such a suit.
It stole money from consumers in the form of illegal tariffs, then refunded the money to people with no obvious relationship to the victims.
Doubtful since any sane person knew the tariffs were not legal and would eventually be overturned.
No chance you’d make this trade unless you had some unique insight to even consider setting it up in the first place.
If his son had half a brain he wouldn’t be trading in this quasi derivative
You mean the guy who kept talking about bringing back jobs to US - jobs requiring Americans to screw iPhone parts - wasn't debating in bad faith, like you are doing here? I am shocked, I tell you. I am really shocked.
Oh? You have some sort of insider knowledge here?
The mental gymnastics people are performing in order to convince themselves that this isn't the most corrupt administration the US has seen in modern history is staggering.
If a fraction of the level of skepticism these people applied to Hunter Biden and Hillary Clinton were applied to Trump and his cronies, they'd be demanding impeachment.
Seriously. These monarchists in this thread contort themselves in every which way to make sure their dear leader is always in the clear.
Shall we forget the shitcoin rugpull Trump has used to launder billions from foreign leaders?
The transparent bribes he's taken to his political org that have resulted in pardons for smuggler, drug lords and murderers?
The $200 million dollar contract Kristi Noem funneled to a company an operative of her for "marketing", formed days before the contract was awarded?
The secretary of labor using funds to throw herself a lavish birthday party and travel around the country?
Kash Patel flying himself and his girlfriend around on an FBI jet with an expensive security detail so they can party?
The fact that insiders are openly insider trading in crypto, the stock market, and these betting markets (both the illegal Venezuela and Iran invasions had huge extremely suspicious bets right before actions were taken).
This barely scratched the surface of this term alone. These fascists are so transparently corrupt.
Divestiture applies to the household.
such hopeful naivety was passable early 2025. having seen 1% of the epstein files, you'd have to be acting in bad faith to say there was no collusion.
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Yeah it's not insider trading. It's just that someone on the inside engaged in trade... Cmon guys you know there's a difference!
You're right, trading by insiders is not necessarily inside trading. Look it up, it's a pretty interesting nerdsniping blackhole.
Written by an insider. Well played.