Employee “Betting” In Prediction Markets: New Risks for Insider Trading and Proprietary Information Disclosure

Summary

The episode explores the rapid rise of prediction markets such as Polymarket and Kalshi and the emerging compliance risks they pose when employees trade on material non‑public corporate information. It highlights high‑profile incidents—including a $32,000 bet on Venezuelan President Maduro’s ouster and a $1 million profit from Google search‑ranking wagers—to illustrate how insider knowledge can be monetized outside traditional securities markets. The host outlines practical steps for compliance teams, from expanding insider‑trading policies to cover prediction markets to monitoring external trading signals, emphasizing the need for proactive governance. Guest experts stress that without clear rules, these platforms become blind spots for confidential data leakage and potential regulatory scrutiny.