On April 23, 2026, the Commodity Futures Trading Commission (CFTC) and the U.S. Attorney’s Office for the Southern District of New York (SDNY) brought parallel civil and criminal charges against U.S. Army Master Sergeant Gannon Ken Van Dyke related to insider trading in connection with event contracts used in prediction markets. The civil complaint marks the first-ever insider trading case brought by the CFTC involving event contracts in prediction markets.
The charges allege Van Dyke used classified knowledge of the military operation to capture Venezuelan President Nicolás Maduro to place bets and profit over $400,000 on an online prediction market. While the charges allege that Van Dyke misappropriated non-public government information, the CFTC and SDNY appear to be attempting to send a message that insider trading, and commodities fraud more broadly, in prediction markets is a top enforcement priority.
Prohibitions on insider trading are not limited to securities trading, and it is important that companies and employees understand that the information they encounter every day could be considered material non-public information (MNPI) subject to insider trading prohibitions beyond the securities markets.
What Are Prediction Markets?
Prediction markets allow users to buy and sell contracts tied to the outcome of real-world events and have grown rapidly in popularity. In the U.S., prediction market platforms may register with the CFTC as designated contract markets (DCM). The CFTC has taken the position that event contracts traded on prediction markets constitute swaps or commodity instruments subject to the Commodity Exchange Act’s anti-fraud and anti-manipulation provisions. Before the Van Dyke indictment, the U.S. Attorney in the SDNY publicly stated that the office was looking to bring prosecutions in this area. This case confirms that the CFTC and DOJ will enforce insider trading rules on prediction markets just as the SEC and DOJ have in traditional securities markets. In addition, the SEC may assert jurisdiction where prediction market event contracts are tied to the performance of securities or where the misappropriated information relates to securities.
In recent remarks, the CFTC’s Director of Enforcement, David Miller, highlighted insider trading in prediction markets as a key enforcement priority:
“Insider trading in the prediction markets—where there is misappropriated information—is precisely the kind of serious violation that we are going after vigorously. We will aggressively detect, investigate, and, where appropriate, prosecute insider trading in the prediction markets.”
Additionally, the CFTC issued a staff advisory in February 2026 underscoring the regulatory obligations for DCMs offering event contracts and an Advance Notice of Proposed Rulemaking in March 2026 seeking public comment on tailored rules for prediction markets, signaling that the regulatory framework is actively evolving.
What Information Qualifies for Insider Trading in Prediction Markets?
Most employees know, at least generally, that they should not trade company stock based on confidential information. But the Van Dyke case illustrates a broader principle: confidential information can arise in many contexts—not just MNPI—and the prohibition on using it extends beyond the traditional financial markets to the newly-created prediction markets.
Traditionally, MNPI includes any information that is material to the company’s securities (i.e., market moving) and non-public, meaning it has not been disseminated in a manner making it available to general participants of a commodities or securities market.
In the prediction market space, chargeable insider information appears to be expanding into new areas of confidential corporate information. Employees across many industries, but especially in technology and life sciences, hold information that could be considered MNPI in a prediction market context even if it would never occur to them to think of it that way.
Here are some examples to show how wide the scope of confidential information can be:
- Traditional MNPI. Healthcare and pharmaceutical employees aware of clinical trial results or FDA submissions before public announcements could wager on a new drug’s sales. Technology employees with advance knowledge of product launches, partnerships, or cybersecurity incidents.
- Confidential Corporate Information. An investor relations clerk with access to an earnings script could purchase a prediction market contract wagering on whether the script contains a specific word count. Content creators or marketing departments could purchase contracts on content from a channel they edit, with advance knowledge of video contents before public release.
Considerations for Compliance Teams
The increasing prevalence of prediction markets, and regulatory reactions to them, raises employee training, policy and process questions for private and public companies alike. Our multi-disciplinary teams are available to discuss your specific company questions and concerns about the implications of prediction markets.
If you have questions about how these issues could affect you or your company, please reach out to any member of Wilson Sonsini’s Fintech and Financial Services, White Collar Crime, Government Investigations, Securities Litigation, and Public Company Representation practices.
