What An FOI Request Tells Us About The CFTC Nominee And Potential Conflicts Of Interest
Emails obtained by The Closing Line via a freedom of information request call into question the incoming Commodity Futures Trading Commission chairman’s involvement with current matters before the agency.
CFTC nominee Brian Quintenz is still a member of the board of directors for the prediction market Kalshi. The CFTC is the regulator of Kalshi; Quintenz has said he would relinquish that position upon his confirmation. Quintenz is still awaiting approval from a Senate committee — which may come on Monday — and confirmation by the full Senate.
In the emails, an intermediary asks for a meeting involving Quintenz and CFTC staff to discuss “confidential” matters that could present a conflict of interest for Quintenz, given his role with Kalshi. Kevin Webb — tapped to be Quintenz’s chief of staff once he takes office — sent this email to the CFTC’s acting general counsel on June 18:
Could you please contact Brian via his gmail address to schedule a briefing on the confidential matters you were unable to discuss with me yesterday (e.g., seriatims in circulation, employees on administrative leave, list of open applications, and ARRP submissions)?
Webb also sent this to the acting GC on June 12; “Caroline” is CFTC Acting Chair Caroline Pham:
“Brian requested and Caroline approved granting me access to Commission information and staff as part of Brian's transition to Chairman, if confirmed, and my transition to Chief of Staff. This access would be beyond my current position as CFTC detailee to Senate Ag and is being facilitated to mitigate challenges posed in the transition from Acting Chair to Chair. Please let me know when you may be available for a call to discuss this matter.”
The emails received by TCL do not indicate whether the meeting asked for on June 18 was scheduled or took place.
“Seriatims in circulation” refers to a process in which CFTC commissioners consider and vote on matters without holding a formal/public meeting. Here, Webb is asking on behalf of Quintenz for a briefing on the seriatims; we don’t have any insight into current seriatims as we sit here. Here’s the bit of the law regarding seriatim in the CFTC. In the past, there have been CFTC matters involving Kalshi handled as a “seriatim matter.”
We don’t know exactly what a “list of open applications” means, but presumably it is a reference to applications for different registrations and licenses in process with the CFTC. That could include designated contract markets (DCMs), which is what Kalshi is. A few notes on this:
At the time of the June 18 email, QCX (recently acquired by Polymarket) had a pending application with the CFTC as a DCM. QCX was approved earlier this month.
Railbird Exchange was approved by the CFTC as a DCM less than a week before that email; the announcement was publicly made on June 18.
There are several other DCM applications that are pending, as well, including one from the parent company of PredictIt, Aristotle.
Another email from TCL’s FOI request, dated July 15, indicates that Quintenz was asking about the CFTC’s actions allowing PredictIt to expand its prediction markets offering.
Despite the redaction of the closing of the email, the scope of TCL’s FOI request means that the email is from Quintenz.
All of this brings up some potential ethics concerns:
The communication asked for by Quintenz’s camp doesn’t appear to be that out of the ordinary in the course or preparing to take over a federal agency in general or the CFTC in particular. But there’s some question about whether Quintenz should be asking for or receiving some of this information, given the fact that he’s still a member of Kalshi’s board.
Here is what Quintenz said in his ethics statement about taking over as chairman: “I will not participate personally and substantially in any particular matter that to my knowledge has a direct and predictable effect on the financial interests of this entity until I have divested it, unless I first obtain a written waiver, pursuant to 18 U.S.C. § 208(b)(l), or qualify for a regulatory exemption, pursuant to 18 U.S.C. § 208(b)(2).”
Quintenz also said in his hearing in front of the Senate Agriculture Committee: “I will have a screener in my office to ensure that no matter inappropriately comes before me.”
Should Quintenz get information about “seriatims in circulation” and applications in process while still involved with Kalshi? Arguably not, at least if any of that scope intersects with Kalshi’s business. And again, to be clear, TCL doesn’t know if the requested meeting happened, nor what was discussed if it did. If Quintenz asked for and received information about DCMs that are or will be competitors of Kalshi’s — or if any active seriatims would impact DCMs — that’s arguably a conflict of interest.
And while tangential to all of this, it’s worth pointing out Quintenz’s stake in Kalshi likely increased during a recent fundraise that valued Kalshi at more than $2 billion.