‘Someone knew, and someone was trading’
In April, the U.S. Department of Justice indicted a U.S. Army soldier, alleging that he had made more than US$400,000 on the prediction market Polymarket, betting on the timing of an operation he had helped plan—the capture of Nicolás Maduro, the Venezuelan president who now awaits trial in a Brooklyn jail. In June, prosecutors opened an insider-trading investigation into George Santos, the former congressman whose fraud sentence the president commuted in October, over bets he had placed on Kalshi, another prediction market, about whether he would attend the State of the Union. As Gerda Reith says here in The Signal, “The scope for insider trading is horrendous, really. Someone with insider knowledge can use it to earn serious money on prediction markets.”
But surely U.S. prosecutors stand ready to enforce the law in white-collar cases? Perhaps sometimes. But perhaps sometimes not. The Justice Department has lost more than a fifth of its lawyers in 16 months. In 2024, it brought nine corporate cases under the Foreign Corrupt Practices Act, which bars American companies from bribing foreign officials, and collected US$1.1 billion; in 2025, it brought two—and collected $123 million. An executive order paused enforcement in February 2025; the deputy attorney general revived it that June, pointing it at bribes that serve the drug cartels. Yet the unit that enforces the law is down to about a dozen prosecutors, and the Securities and Exchange Commission hasn’t brought a case of its own since 2024. White-collar prosecutions have fallen further than at any time since TRAC, the group at Syracuse University that counts them, began keeping records in 1986.
Congress has repealed nothing—but prosecutors have stopped bringing the cases. So who called them off?
John C. Coffee Jr. is the Adolf A. Berle Professor of Law at Columbia Law School, the director of its Center on Corporate Governance, and the author of Corporate Crime and Punishment: The Crisis of Underenforcement. Coffee says the president called them off. Donald Trump has instructed the Justice Department not to bring criminal sanctions for regulatory offenses; he has taken insider trading and price fixing off the list of prosecutorial priorities. He’s convinced that U.S. prosecutors too often turn the criminal law on American businessmen, and he counts himself among their victims.
And the stakes are very real. No one grows up knowing that insider trading is wrong the way everyone knows that murder is wrong—where there’s money in it and little chance that anyone will catch you, people will take it. Already, share prices climb in the days before merger announcements. All of it, Coffee says, may confirm for many Americans what they already suspect—that the economy is rigged in favor of the rich …
Gustav Jönsson: What’s happening here?
John Coffee: Criminal enforcement of white-collar offenses has fallen steeply. To be sure, it fell under the first Trump administration too, but that decline now looks small relative to this one.
One of the first things Trump did in office was issue an executive order. The title tells you what it says: “Fighting Overcriminalization in Federal Regulation.” He thinks—or claims to think—that federal regulation is excessively criminalized, and the logic he gives for that idea is interesting. He says the United States is generally, and drastically, overregulated. That’s the first sentence of the executive order; he doesn’t waste any time. Then he proves it by pointing out that the Code of Federal Regulations has 48,000 sections. It does. But they’ve been there for 20 years or more, and we live in a complex world, so we have a complex body of federal regulations.
