Multiple incidents prompted speculation about possible insider trading in prediction markets by federal employees
WASHINGTON, D.C. -Today, Congresswoman Maxine Waters (D-CA), the Ranking Member on the House Financial Services Committee, U.S. Senator Elizabeth Warren (D-Mass.), the Ranking Member on the Senate Banking Committee, along with Senators Amy Klobuchar (D-Minn.), Jeff Merkley (D-Ore.), Representatives Angie Craig (D-Minn.) and 23 lawmakers, wrote to the Commodity Futures Trading Commission (CFTC) and the Office of Government Ethics (OGE) urging the agencies to address illegal insider trading in prediction markets by federal employees.
Since January, multiple incidents have prompted heavy concern about possible insider trading in prediction markets by federal employees. A Polymarket user made $400,000 by betting on the capture of Venezuela’s former leader, Nicolas Maduro. Prediction market users projected that White House Press Secretary Karoline Leavitt’s speech would last for less than 65 minutes and profited when she abruptly ended the speech just 30 seconds before the 65-minute mark. Since then, there have been numerous reports of suspicious trades relating to the war in Iran.
The lawmakers point out that currently, under the Commodities Exchange Act (CEA), as amended by the STOCK Act, it is unlawful for federal employees to engage in insider trading, including in prediction markets.
“We ask that the CFTC and OGE issue guidance reminding federal employees of their existing legal obligation to refrain from using their insider governmental information to profit from prediction market trades,” wrote the lawmakers.
In addition, the lawmakers requested that the CFTC and OGE provide a staff-level briefing on this issue and address, among other matter, whether it has become aware of any possible instances of any federal employees engaging in insider trading in prediction markets and any steps the agencies may have taken to detect and prevent them from doing so.
The lawmakers who joined the letter include: Representatives Salud Carbajal (D-Calif.), André Carson (D-Ind.), Marcy Kaptur (D-Ohio), John Mannion (D-N.Y.), James McGovern (D-Mass.), Seth Moulton (D-Mass.), Eleanor Holmes Norton (D-D.C.), Andrea Salinas (D-Ore.), Eric Sorensen (D-Ill.), Suhas Subramanyam (D-Va.), Mike Thompson (D-Calif.), Gabe Vasquez (D-N.M.), Eugene Vindman (D-Va.), and Dina Titus (D-Nev.) and Senators Cory Booker (D-N.J.), Catherine Cortez Masto (D-Nev.), Ruben Gallego (D-Ariz.), Kirsten Gillibrand (D-N.Y.), John Hickenlooper (D-Colo.), Andy Kim (D-N.J.), Mark Warner (D-Va.), Raphael Warnock (D-Ga.), and Jeanne Shaheen (D-N.H.)
