From a purported scheme to leak confidential information about NBA games to sports gamblers, to bets on the Nobel Peace Prize announcement, recent headline-grabbing allegations highlight that insider trading is a growing potential issue in prediction markets.
In a recent Law360 piece, Noah Solowiejczyk and Rebecca Matsumura explore how regulators could intercede and choose to bring enforcement actions, as well as how businesses unaccustomed to insider trading risk should respond.
“In the brave new world of prediction markets, insider trading is no longer limited to trading around M&A announcements by public companies,” they wrote. “Private businesses that never considered insider trading as a risk may need to reassess that calculus now that a myriad of forms of confidential information can be traded for a profit in the prediction markets.”
Read the full Law360 article. (subscription required)