"The trades - including one placed on Friday that netted one unknown individual more than $400,000 in profits - led to widespread speculation that gamblers were basing their bets on material non-public information. While such insider trading in capital markets is already illegal and often prosecuted by the Justice Department and Securities and Exchange Commission, online prediction markets are far less regulated."
"Driving the news: Rep. Ritchie Torres' (D-N.Y.) three-page bill, a copy of which was obtained by Axios, is called the Public Integrity in Financial Prediction Markets Act of 2026. It would ban federal elected officials, political appointees and bureaucrats from making insider trades on prediction sites sites such as Polymarket. Specifically, the bill prohibits such government officials from trading based on information that is not publicly available and that "a reasonable investor would consider important in making an investment decision.""
"What they're saying: Elisabeth Diana, a spokesperson for the prediction website Kalshi, noted that they are already regulated by the Commodity Futures Trading Commission and ban insider trading on their platform. "We're looking at the specifics of the bill, but we already ban the activity it cites and are in support of means to prevent this type of activity," she said. Diana added that the "activity from the past few days" did not occur on their platform."
Suspicious trades on online prediction markets, including one that reportedly yielded over $400,000 for an unknown individual, prompted concerns about trading on material non-public information. A three-page bill titled the Public Integrity in Financial Prediction Markets Act of 2026 would bar federal elected officials, political appointees and bureaucrats from making insider trades on prediction sites such as Polymarket. The proposed measure would prohibit trading based on non-public information that a reasonable investor would deem important. Regulators and platforms differ on oversight: Kalshi said it is regulated by the CFTC and bans insider trading, while Polymarket did not comment.
Read at Axios
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