1. Senators send seven questions over the Gabriel Perez Kalshi case
Democratic Senators Elizabeth Warren of Massachusetts and Jeff Merkley of Oregon have asked White House Counsel Will Scharf whether he would recommend that President Donald Trump grant clemency to Gabriel Perez, a former White House teleprompter operator who settled federal charges over Kalshi bets on the wording of Trump's speeches. The letter, dated November 9, sets a November 23 deadline for answers.
The clemency question is the seventh and final item in the letter, which Warren's office made public on November 10. The other six questions focus on how the White House handles ethics, nonpublic information and trading by its staff, and what it did once the Perez case came to light.
The letter turns a single enforcement case into a broader test of White House ethics practices at a time when prediction markets have grown into a mainstream, and politically connected, corner of finance. The senators are asking not only what happened with one employee, but whether the safeguards around everyone else are adequate.
2. What the Gabriel Perez Kalshi settlement involved
Perez's case centers on so-called mention contracts on Kalshi, a federally regulated prediction market. These contracts settle based on whether a particular speaker says certain words during an event, such as a speech or press conference. Traders buy positions on whether a given word or phrase will be used.
The Commodity Futures Trading Commission (CFTC), which oversees Kalshi, said in August that Perez traded mention contracts while working at the White House. Because his job was operating the teleprompter for presidential speeches, he was in a position to see the text the president was expected to read before the public heard it. That kind of advance access is exactly the sort of nonpublic information that ethics rules and trading laws are designed to keep out of markets.
According to the CFTC's consent order, the trading took place between December 2025 and March 2026. The senators' letter states that Kalshi itself investigated the trades and referred the matter to the regulator, a detail that shows the exchange's own surveillance played a role in bringing the case forward.
The structure of these contracts is what makes the case unusual. In most insider trading cases, the nonpublic information concerns a company's earnings, a merger or a regulatory decision. Here, the information was the wording of a speech. For an ordinary trader, the outcome of a mention contract is uncertain until the words are spoken. For someone who has already seen the prepared text, much of that uncertainty disappears, which turns what should be a forecast into something close to a known result.
3. How much Perez must pay under the CFTC order
Under the settlement, Perez must give up the $107,539.02 he earned from the trades. He must also pay a civil penalty of $65,000, an amount the CFTC reduced in recognition of his cooperation with the investigation.
In addition to the financial terms, Perez is barred from trading for three years. Trading bans of this kind are a standard tool for the CFTC, which uses them to keep people found to have misused markets away from those markets for a set period.
Settlements such as this one allow a case to be resolved without a trial. The person agrees to the terms set out in a consent order, and the regulator closes the matter on that basis. That resolution is what gives the senators' clemency question its edge: they want to know whether the White House would support wiping away the consequences of a case that has already been concluded.
The disgorgement figure is precise down to the cent because it reflects the actual profits identified from the trades, rather than an estimate. Disgorgement is meant to strip away whatever gain a person made from misconduct, while the separate civil penalty serves as the punishment. Taken together, the two amounts total a little more than $172,500.
4. Why are senators asking about clemency?
The senators want to know whether Scharf, as the president's top lawyer, would recommend a pardon or other form of clemency for Perez. Clemency is a power the Constitution gives the president to forgive federal offenses or reduce their penalties, and White House counsel often play a role in advising on such decisions.
By placing the question in writing and setting a deadline, Warren and Merkley are seeking a clear statement of the White House's position before any clemency decision could be made. A public answer, or a refusal to answer, would itself become part of the political record surrounding the case.
The question is also notable for where it sits in the letter. Positioned last, after a series of questions about internal practices, it frames clemency as the endpoint of a broader inquiry into whether the White House is taking the misuse of insider information seriously.
5. Questions on staff trading and ethics training
Beyond the clemency issue, the letter asks whether the White House knows of any other staff members who used inside information to place bets or make trades. That question goes to whether the Perez case was an isolated incident or a sign of a wider problem.
The senators also ask whether White House employees receive training on the misuse of nonpublic information, and specifically on trading in financial markets or prediction markets. Prediction markets present a relatively new challenge for ethics programs, since they allow wagers on events such as speeches, policy announcements and personnel decisions that government staff may know about in advance.
A further question asks whether White House ethics agreements have changed. Ethics agreements set out the commitments officials make to avoid conflicts of interest, and the senators want to know whether those commitments have been updated in light of the case.
The questions about training and existing staff matter because ethics programs are largely preventive. Rules on nonpublic information are only effective if employees understand that they apply to newer products such as event contracts, and not only to traditional securities like stocks and bonds. The senators appear to be testing whether White House guidance had caught up with that reality before the Perez trades took place.
6. The internal investigation and the staff memo
Several questions focus on how the White House responded once it learned of Perez's trading. The senators ask how the internal investigation into his conduct concluded and whether he was fired. The letter does not state whether he was dismissed, which is why the question is being asked.
The letter also asks whether anyone at the White House communicated with the CFTC or the Justice Department about Perez. Such contacts would be relevant to understanding how the case was handled, and whether political officials had any involvement in an enforcement matter.
Finally, the senators are asking for a copy of an internal memo that warned White House staff against using nonpublic government information to bet on Kalshi and Polymarket. Obtaining the memo itself would show what guidance staff received and when it was issued.
7. Trump family ties to prediction markets
The letter places the Perez case alongside the Trump family's own financial interests in prediction markets. It cites Donald Trump Jr.'s role as an advisor to both Polymarket and Kalshi, as well as his financial stakes in the two companies.
It also points to Truth Predict, a prediction market that Trump Media has announced it is developing with the crypto exchange Crypto.com. Trump Media is the company behind the president's Truth Social platform.
By raising these connections, the senators are signaling concern that the White House could face conflicting incentives when it comes to policing prediction market activity. When members of the president's family hold stakes in the industry, decisions about enforcement, regulation or clemency in cases involving that industry draw closer scrutiny.
8. What the case means for Kalshi and prediction markets
For Kalshi, the case is a reminder of both the risks and the safeguards of its business. Mention contracts and other event-based markets can attract people with privileged access to the outcome, which creates obvious potential for abuse. At the same time, the letter notes that Kalshi investigated the trades and referred them to the CFTC, an example of an exchange flagging suspicious activity to its regulator.
Prediction markets have expanded rapidly in the United States, offering contracts on elections, economic data, sports and a wide range of other events. As they grow, questions about insider trading, who can participate and how government employees should be restricted have become more pressing. The Perez case is one of the clearest examples yet of those questions reaching the White House itself.
Kalshi operates as a CFTC-regulated exchange, which means it is subject to federal rules against fraud and manipulation and is expected to monitor trading on its platform. The CFTC, for its part, is the federal agency responsible for derivatives markets, including the event contracts that prediction markets list. The Perez matter illustrates how that oversight chain is supposed to work, from an exchange detecting unusual activity to a regulator bringing an enforcement case.
9. What comes next
Warren and Merkley have asked Scharf to respond by November 23. The letter does not carry the force of a subpoena, so the timing and completeness of any answer will be up to the White House.
Whatever the response, the letter puts on record a set of questions that are likely to resurface as prediction markets continue to grow and as the Trump family's involvement in the sector deepens. Any move toward clemency for Perez would now be measured against the questions the senators have already raised, and against the settlement he agreed to with the CFTC.