DOJ and CFTC target insider trading on prediction markets
Federal prosecutors and the Commodity Futures Trading Commission have brought actions against employees who traded event contracts using nonpublic information, according to Polsinelli attorneys. The law firm is urging companies to update compliance programs to address prediction-market trading by employees with access to material nonpublic data.
Prediction market platforms and their corporate users now face the same insider-trading enforcement framework as traditional securities markets, raising the compliance bar for firms whose employees might trade on nonpublic information.
Joins the CFTC's enforcement stack against Kalshi, Novig, and other registered platforms as the commission simultaneously probes self-certification, overrides state geoblocks, and now invokes insider-trading law against event-contract traders.