We analyze how regulatory leniency under the Trump administration disproportionately affected firms in high-versus low-corruption states. Using an event study approach around Trump’s 2025 inauguration day, we report stronger market reactions for firms in corruption-prone states, reflecting anticipated rent-seeking opportunities. Further analysis shows that within the firms domiciled in states with higher corruption rates, smaller, growth-oriented, and underperforming firms benefited the most. By linking federal policy shifts to localized corruption dynamics, our findings reveal how politicized regulatory environments distort capital markets, privileging firms positioned to capitalize on institutional weaknesses.