Trump could have made a lot of money by selling stocks before tweeting about imposing tariffs on China and then buying more of them back when the price of the stocks has dropped. Would this fall under the ban on insider trading, or does insider trading only apply to confidential information about companies?

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    This would qualify as a pump and dump scheme, and would be illegal as a result. en.wikipedia.org/wiki/Pump_and_dump
    – Allure
    May 6, 2019 at 12:29
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    @Allure an element of pump and dump is making misleading statements. There is no misleading statement here.
    – phoog
    May 6, 2019 at 12:54
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    @phoog It doesn't have to be misleading. It just has to be for the purpose of inflating the stock then dumping it.
    – Putvi
    May 6, 2019 at 23:15
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    @Putvi every description of pump and dump I've seen stresses or at least mentions misleading statements. An example is sec.gov/fast-answers/answerspumpdumphtm.html. Anyway, the hypothetical act here does not meet the definition of pump and dump on a couple of additional counts, since the manipulation of the price is downward, not upward. This is a good example of why questions should not be answered in comments.
    – phoog
    May 7, 2019 at 4:02
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    @phoog yes, it is commonly used that way. I just meant in terms of criminal prosecutions, they would charge you either way. Not everything in life is going to meet some Wikipedia or sec site Q and A for every instance.
    – Putvi
    May 7, 2019 at 15:58

2 Answers 2


There is no statutory definition of insider trading, and the question of who is included is answered by the SEC. It includes "Government employees who traded based on confidential information they learned because of their employment with the government". Under 5 USC 2105, POTUS is an "employee", though that is w.r.t. Title 5 and insider trading laws are under Title 15. But as it happens, the Title 15 definition of "executive branch employee" assigns the Title 5 definition of "employee" to "executive branch employee" and explicitly lists POTUS.

Pub. L. No. 112-105, §§ 9(b)(1) explicitly says

Executive branch employees, judicial officers, and judicial employees are not exempt from the insider trading prohibitions arising under the securities laws, including section 10(b) of the Securities Exchange Act of 1934 and Rule 10b–5 thereunder.

Insider trading laws are not limited to "information about company X", they are framed in terms of non-public information, which could include information about a country: "no executive branch employee may use nonpublic information derived from such person’s position as an executive branch employee or gained from the performance of such person’s official responsibilities as a means for making a private profit".

  • Technically in this scenario trump didn't "learn" something because of his employment with the government. He choose to take an action in his role as an employee. In theory he doesn't even need to take any action other then tweeting something, The threatened tariffs don't have to be imposed for him to benefit. I still think this would count as insider trading, from my limited understanding of the relevant precedents, but your answer as it stands now does not demonstrate that making threats in the role of a company to affect the market would count as insider trading.
    – dsollen
    Feb 5, 2020 at 20:10

I take the relevant part of your question to be whether a president can break the law, taking it as a given that the stock manipulation you describe is illegal if proven.

The short answer is yes, the president can, has, and will again break the law. The president is above the law.

There are basically three ways the president can be removed from office:

  1. forcibly by assassination, kidnapping, and similar violent actions;
  2. by impeachment by the senate for crimes and misdemeanors, but there is no precedent for that;
  3. by an application of the 25th amendment, if the president is incapacitated by a mental or physical illness; but there is no precedent for that.

None of these are realistic threats today to keep President Trump in check, suggesting that the crime you describe CAN be committed without sanction.

  • What is your basis for claiming that POTUS is above the law?
    – user6726
    Feb 5, 2020 at 19:50
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    I thought the question was pretty clearly about whether such conduct was legal, and not about what would be the consequences if it is illegal. Feb 5, 2020 at 20:07
  • I thought the question had multiple interpretations since it pretty much asks "Can Trump legally [action that clearly breaks the law for non-presidents]?" POTUS is above the law according to today's ruling on two articles of impeachment that document actions that 'break' the constitution.
    – PatrickT
    Feb 6, 2020 at 1:02

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