Wall Street trader landed $7.5m windfall on suspiciously-timed investment before surprise concession on debt limit

Biden and Kevin McCarthy

US President Joe Biden and House Speaker Kevin McCarthy (R-CA)Drew Angerer/Getty Images

  • A debt ceiling agreement has surprisingly brightened the Mountain Valley pipeline.

  • A trader bought 100,000 call options on the pipeline owner days before it was announced.

  • The identity of the mystery trader is unknown, and some believe it to be insider trading.

As part of the debt ceiling agreement, a surprise concession that was included in the bill was the approval of the Mountain Valley Pipeline, a 304-mile natural gas connection from the northwest of the West Virginia to southern Virginia.

A pet project of West Virginia Sen. Joe Manchin that had been bogged down in Congress, the law forces action on permits that should move the project forward.

However, there was no public reason to believe the pipeline was in the deal, making the actions of a mystery trader – who killed his inclusion – somewhat suspicious, according to a Bloomberg analysis of trade data.

Shares of Equitrans Midstream Corporation fell 35% last year. On May 24, days before a deal was struck, a mystery trader bought 100,000 call options – essentially bets on a rise in the stock price – on Equitrans Midstream. Then, on May 27, the debt deal, including the Mountain Valley pipeline, was done.

Following this announcement, Equitrans Midstream shares jumped 49%.

On the face of it, the bet netted the trader $7.5 million last Friday, according to Bloomberg. Options are still open, so this number could increase if Equitrans Midstream continues to rally.

This kind of perfect timing is, needless to say, fishy. The Mountain Valley deal was kept secret until the debt deal was announced. Some are suspicious enough to want him investigated for possible insider trading.

Equitrans said neither they nor any executives were involved in the transactions. Manchin himself said he knew nothing about options trading. Negotiations played out very close to the vest between House Speaker Kevin McCarthy and the White House. Ethics watchdogs want answers, according to Bloomberg.

Members of Congress are not allowed to exchange confidential information, although a 2021 Insider investigation found repeated STOCK law violations among members.

Read the original article on Business Insider

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