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Manhattan prosecutors probe potential insider trading on prediction markets: CNN
Federal prosecutors in Manhattan are investigating if federal employees used insider information to profit from prediction market trades on events like Nicolás Maduro's capture, amid growing regulatory scrutiny.
- Federal prosecutors in Manhattan are investigating whether lucrative bets placed on prediction markets violate insider trading and anti-fraud laws, marking an escalation by the Justice Department into the fast-growing industry.
- Fresh scrutiny follows well-timed wagers on high-profile events, including the capture of Venezuelan leader Nicolás Maduro and war outcomes in Iran, raising concerns about potential access to nonpublic information.
- U.S. Attorney for the Southern District of New York Jay Clayton warned that prediction markets do not "insulate you from fraud," though criminal defense lawyer Aitan Goelman noted prosecuting such cases remains legally untested.
- Platforms like Polymarket and Kalshi are proactively updating rules and investigating suspicious activity, with Kalshi having referred over a dozen cases to law enforcement in the past year.
- State-Level enforcement is intensifying: California Democratic Governor Gavin Newsom recently banned state officials from using insider knowledge on prediction markets, while Arizona filed criminal charges against Kalshi for allegedly operating an illegal gambling business.
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9 Articles
White House insiders put on notice as federal prosecutors look into insider trading
Federal prosecutors were determining if prediction market bets have violated insider trading laws, according to a CNN report Monday. The heads of the securities and commodities fraud unit in the U.S. attorney's office for the Southern District of New York reportedly met with Polymarket representatives to learn more about how existing laws could be interpreted as part of an investigation into possible misconduct. Polymarket is one of the leading …
Federal prosecutors are exploring whether prediction market bets trip insider trading laws
Federal prosecutors in Manhattan are exploring whether certain lucrative bets placed on prediction markets have violated insider trading and other laws, multiple sources told CNN.
Democrats press Trump administration on insider trading in prediction markets
More than 40 Democratic lawmakers are pressing the Trump administration to provide guidance underscoring that federal employees cannot use nonpublic information to trade on prediction markets. Led by Sen. Elizabeth Warren (D-Mass.), the group in a Sunday letter raised concerns to the heads of the Commodity Futures Trading Commission (CFTC) and the Office of Government...
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