MVA Attorneys Published in TRADERS Magazine on Prediction Markets and Insider Trading Risk
Moore & Van Allen attorneys Barrett Morris, Tiffany Payne, and Nader Raja have authored an article for TRADERS Magazine examining the rapidly evolving enforcement landscape for prediction markets.
In “Insider Trading Meets Prediction Markets: Six Steps Every Market Participant Should Take Now,” the authors discuss recent parallel enforcement actions by the U.S. Department of Justice and the Commodity Futures Trading Commission involving event contracts. These actions signal that trading event contracts based on misappropriated information—where a duty of trust and confidence exists—may be scrutinized under anti-fraud principles analogous to insider trading frameworks applicable to traditional financial products.
The article outlines several takeaways, including:
• Prediction markets are a top enforcement priority
• Information advantages and use of nonpublic information face heightened scrutiny
• Compliance expectations are rising, including surveillance and SAR obligations
• Cross-border activity does not insulate against U.S. jurisdiction
• Ongoing state-federal jurisdictional conflict requires close monitoring
• Insider trading policies and training should be updated to address prediction market risks