Jay Clayton said regulators would likely examine the unusual burst of trading activity early Monday that preceded a market-moving social media post from President Donald Trump.
“Any move like that in advance of any announcement, the regulators are going to look at,” Clayton, a former chair of the Securities and Exchange Commission, said Wednesday on CNBC’s “Squawk Box,” referring to the spike in futures trading minutes before Trump disclosed that the U.S. and Iran had held talks and that planned strikes on Iranian infrastructure would be halted.
Clayton, now the U.S. attorney for the Southern District of New York, said authorities would work to reconstruct the activity and identify participants across markets.
“They’ll go back and track every single thing, everyone,” he said.
The SEC declined to comment.
Clayton noted that regulators have the most visibility in cash equities, where trading data allows for detailed analysis of who bought and sold securities and when. Surveillance in other areas, including futures and commodities markets, can be more complex and less comprehensive.
“I always tell people our best surveillance is in the cash equities markets — like, we can track it,” Clayton said. “Commodities markets, and others, it’s a little more difficult.”
The comments come after a sharp spike in trading volume in S&P 500 and oil futures around 6:50 a.m. New York time, roughly 15 minutes before Trump’s post helped lift equity markets and push oil prices lower.
“There’s a point here which Congress should act on — let’s make it clear across the board,” he said. “The law is not as clear as it should be. … There are a lot of people who say this is OK. I don’t feel like it’s OK.”