Events | 04-24-26
Live Discussion on Prediction Markets: Enforcement Signals & Emerging Risks
Prediction markets can no longer be considered a fringe issue, something recent enforcement activity is making clear.
Kalshi, a regulated prediction market platform, recently took action against individuals who traded on outcomes where they had direct, non-public insight. The message that sends is straightforward: even small trades can trigger enforcement when market integrity is at risk.
A few key takeaways from these cases stand out:
- Context matters, and cooperation impacts outcome. Traders who acknowledged violations received settlements, while a trader who did not cooperate faced a harsher disciplinary action.
- Rules are enforceable and enforced. These cases were handled under Kalshi’s CFTC-approved exchange rules, with the potential for referral to regulators (e.g., CFTC or DOJ) in more serious situations.
- Behavior matters more than size. Even small trades were penalized where participants could influence outcomes, reinforcing a strict approach to market integrity.
For compliance teams, this should immediately raise questions like: Are our employee trading policies keeping pace with event-based contracts? Does our surveillance program capture activity on emerging platforms? How should our firm think about MNPI in non-traditional contexts?
Join the Conversation Live on May 7
To help firms navigate this emerging risk area, Bates Group and Hadrius are hosting a live discussion Thursday, May 7, 2026 at 12 p.m. ET, featuring legal, compliance, and regulatory experts from Bates Group, Hadrius, and Michael Best.
Key Insights:
- What prediction markets are and why they matter now — how event-based contracts work, how they're being classified, and why adoption is accelerating
- Why regulators are focused on this space — the insider trading, MNPI, and manipulation risks drawing scrutiny from the CFTC, SEC, and state regulators
- Where firms are most exposed — the supervision and surveillance gaps that leave employee trading activity unmonitored across accounts, products, and workflows
- What a compliant framework looks like in practice — from policy design and pre-clearance requirements to event-driven surveillance, restricted lists, and scalable enforcement
- How to move from policy to systems — why compliance infrastructure, not documentation alone, is what firms need to enforce controls consistently at scale
Don’t miss this opportunity to hear from leading voices in compliance, legal, and regulatory as they share insights and solutions you can apply immediately. Register today to secure your spot.