Scott Galloway warned that President Donald Trump’s sweeping global tariffs have become a “weapon of insider trading” – allowing those around him to buy and sell stocks at opportune moments based on non-public information. Galloway, a marketing professor and entrepreneur turned media personality, made the comments on the latest episode of his Pivot podcast, alongside co-host Kara Swisher.
Galloway warned that corruption surrounding the stock market could dampen investors’ trust in the market overall, potentially decimating the capital markets that fuel the economy.
“This is how terrible a business person and negotiator Trump is. Trump puts a policy, a tariff of 145 percent, and then he admits himself, well, that was kind of high, and then he lowers it to 30 because the markets throw up. So essentially, if he’s a poker player, he shows up to the table with all this bravado and swagger, and he goes all in. And then before he even sees what the other players say or do, he goes, I fold, I fold. He negotiates against himself,” Galloway began.
“Yeah, that’s what it feels like,” Swisher added.
“And nobody takes him seriously. But here’s the real story, in my view. This is nothing but a weapon of insider trading,” Galloway continued, adding:
And that is he can create volatility. He can take markets up for some of their biggest gains in history when he takes these ridiculous trades off the table. He can take markets down.
And the people around him are trading stocks like fucking crazy. Including, you’re going to find that some of his hedge fund buddies that he speaks to or tucks them in a bed at night, some of whom we talk a lot about, are going to vastly outperform the index.
“Yeah. And even representatives, Marjorie Taylor Greene, there was a whole bunch of them that were trading,” Swisher noted.
“Okay. Let’s talk about this. The fish rots from the head,” Galloway replied, adding:
The nation’s top cop is the attorney general.
Yeah. Pam Bondi.
Pam Bondi on April the 2nd sold somewhere between one and five million in Trump Media stock. Why April 2nd? That was the same day, the Liberation Day tariffs were announced.
So we have the person supposedly ensuring the markets have rule of fair play is trading stocks the day her boss announces tariffs that will take the markets down. She sells a ton of stocks and it is everywhere. There are state department officials, Michael Platt, staff director in Congress, sold around escalating– They are trading in and out of the market based on who knows what, when. Huge spike in options volume right before he makes these announcements, which means that people know something. And people hear this.
I just want to try and connect the dots here. People hear this and go, okay, there’s always been grift. Speaker Pelosi, Speaker Emerita Pelosi, there’s always been grift.
So some people are getting rich, you’re fine. What people fail to make the connection is the following. Is that when you buy same day options, because you know he’s about to reduce the tariffs and the markets are about to scream up, somebody is on the other side of the trade that doesn’t have that insider information, that is selling that person that option and is going to get taken to the laundry, is going to lose a shit ton of money.
And the reason why, off a $27 trillion economy, we have a $50 trillion market cap stock market, which gives companies the ability to raise money. It gives people the chance to save money for their retirements. It gives people incredible compensation upside if they get options.
The reason why we have such incredibly deep pools of capital to create prosperity and risk aggressiveness, we have $5 million in risk capital for every startup, Europe has $1 million. It’s because people believe there’s a rule of fair play and fair trade.
Now, let’s look at Russia. Russia is 1/14th the size of our economy, 2 trillion, we are about 28 trillion. The total value of the Russian stock market is $80 billion. Because people don’t trust it.
People are like, unless you know Putin, you don’t know what’s going to happen. There’s so much insider trading and kleptocracy that the markets don’t have any trust. So what do you have?
You have essentially, even on a size-adjusted basis, our stock market is 70 times the value of the Russian stock market, even ramping it up to adjust it for the difference in the size of the economy. So when a bunch of people think, I lost money and I’m not on the inside, I’m not going to participate in the markets.
“Yeah, I agree. That’s a really fantastic take, actually. I really, what’s going on here, he’s also doing it because he doesn’t have a plan at the same time, and people are– either he is in on the grift, or he’s so dumb and a bad business person, they’re playing him,” Swisher replied.
Later in the conversation, Galloway circled back to the topic, “Can I give you some more data, just real quick?”
“Sure, but we have to move on, but go ahead. Okay, go ahead,” Swisher said.
“Okay, just because this insider trading thing, I don’t think people realize what this does to the unbelievable, incredibly cheap capital and pools of capital that the US is,” Galloway said as Swisher cut in, “And the trust that people have in the markets, despite all the problems they’ve had. Now, they’ve had insider trading issues.”
“For 99 percent of our existence on this planet, people would never give money, sell something to strangers in a marketplace,” Galloway continued, adding:
Trust in markets is literally one of the jet fuels of our prosperity. Okay, so this has been going on for a while. In this first term, Carl Icahn sold 31 million in steel-related stocks the day before Trump announced steel tariffs in 2018.
On March 30th, three days before Trump’s initial tariff announcement, at least three hedge fund managers attended a private dinner in Mar-a-Lago, and all three dramatically increased their short positions in the 48 hours following that dinner. One of those funds, Blue Stone Capital, is run by a guy named Brian Shevlin, who was instrumental in the early days of Trump’s media SPAC merger. Blue Stone Capital increased its short position in Tesla by 300 percent or fourfold on April 1. One day, Kara, before the tariff announcement that sent Tesla shares down 17 percent, and then the fund then closed most of its short positions on April 8, right before Tesla rebounded 18 percent up on news of the tariff pause.
So this guy either has a crystal ball or a gut like we’ve never seen in investing, or he is getting information from people at the very top about non-public information.
So why would an average investor ever buy or sell Tesla stock when chances are someone on the other end knows more than I do?
“And we have an SEC who’s not enforcing any of this. As I told you, there’s a lot of people outside of government following all of this and collecting all this information. If our government’s not going to, there are technical people,” Swisher concluded.
“Even some podcasters,” Galloway said, adding, “I’m keeping notes on all this shit.”
Watch the full clip above.
