Lankler Siffert & Wohl announces the publication of founding partner John S. Siffert’s latest Law360 article, “Two Prediction Market Cases Will Test Insider Trading Theory.”  This in-depth analysis explores the rapidly evolving legal landscape of prediction markets, insider trading law, and federal fraud enforcement.  As prediction markets gain traction in the financial sector, prosecutors and regulators increasingly address complex legal questions surrounding the application of traditional insider trading and fraud principles to innovative trading platforms.

The article examines two high-profile criminal cases charged by the U.S. Attorney’s Office for the Southern District of New York involving alleged misuse of confidential information on the prediction market platform Polymarket.  Drawing on decades of Supreme Court and Second Circuit precedent, the article provides a comprehensive legal analysis of how federal wire fraud statutes apply to trading on confidential nonpublic government and corporate information.  It also explores key legal challenges, including whether such conduct meets the statutory requirement of obtaining “money or property,” whether the government can proffer evidence that each employer is the victim of “property” loss (instead of competing bettors in the prediction market), and how legal standards differ when the alleged victim is a government agency versus a private corporation.  

This timely article highlights critical developments at the intersection of white collar crime, financial regulation, and emerging digital markets.  As enforcement agencies continue to test the boundaries of insider trading law in new contexts, these cases may set important precedent for businesses, investors, and professionals handling sensitive information.  The article’s insights offer valuable guidance on the future of prediction market regulation, insider trading enforcement, and federal fraud litigation.  The full article, which benefitted from the participation of LSW associate Megan Q. Liu, is available here.

Law360 – 2 Prediction Market Cases Will Test Insider Trading Theory