Congressman Introduces Legislation To Criminalize Insider Trading On Prediction Markets (axios.com) 55
Ritchie Torres has introduced a bill to ban government officials from using insider information to trade on political prediction markets like Polymarket. The bill was prompted by reports that traders on Polymarket made large profits betting on Nicolas Maduro's removal, raising suspicions that some wagers were placed using material non-public information. "While such insider trading in capital markets is already illegal and often prosecuted by the Justice Department and Securities and Exchange Commission, online prediction markets are far less regulated," notes Axios. From the report: Rep. Ritchie Torres' (D-N.Y.) three-page bill, a copy of which was obtained by Axios, is called the Public Integrity in Financial Prediction Markets Act of 2026. It would ban federal elected officials, political appointees and bureaucrats from making insider trades on prediction sites sites such as Polymarket. Specifically, the bill prohibits such government officials from trading based on information that is not publicly available and that "a reasonable investor would consider important in making an investment decision." [...] It's not clear if House Speaker Mike Johnson (R-La.) would put Torres' bill to a vote in the House or if President Trump would sign it. "We're looking at the specifics of the bill, but we already ban the activity it cites and are in support of means to prevent this type of activity," said Elisabeth Diana, a spokesperson for the prediction website Kalshi.
Diana added that the "activity from the past few days" did not occur on their platform.
Diana added that the "activity from the past few days" did not occur on their platform.
What congress already does (Score:5, Interesting)
Of course the king of fraud won't sign but that's not the problem. Who has the power to seize e-mails and trace the payment of moneys? Without that, it's a "been a very naughty boy" posture: If you don't get caught red-handed, it's easy money. In other words, what US congress already does.
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Courts already have this authority with discovery process.
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Same way it works with any insider trading. Cops get a warrant to sieze communications if they recieve credible information that something dodgy is going on.
This is somewhat a solved problem. Just do discovery, like courts and cops have been doing for hundeds of years.
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Of course the king of fraud won't sign but that's not the problem. Who has the power to seize e-mails and trace the payment of moneys? Without that, it's a "been a very naughty boy" posture: If you don't get caught red-handed, it's easy money. In other words, what US congress already does.
A better solution is to do the same thing that should be done with stock trading: Require government officials (and their family members) who might have access to insider information to publish their trades in advance. The advance notice wouldn't even have to be large if the information was published electronically in a feed that could easily be monitored by other investors and the press. A couple of business days, maybe less. This should apply to all securities, real-estate purchases, predictions, etc.,
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Do you think that it would make a difference? It's already against the law to use insider information within the stock exchange. Yet we see how successful Nancy Pelosi and other House members are at their stock investments. Even beating the top traders at their market investments.
Do you think that banning them in prediction markets will have any affect when it hasn't made a difference within the stock exchange?
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Indeed you are correct. It will change nothing, as far as congress and other powerful people are concerned. But it may make it easier to prosecute some low level office drone who places a small bet based on some memo they weren't supposed to have seen but somehow did.
Just a few days late, eh? (Score:2)
Oh, wait, it ain't going to pass anyway.
So more selectively-enforced, weaponized laws? (Score:5, Insightful)
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Sure, just convince 6 Republican House members to start.
After that you need to convince 22 Republican Senators to remove the gorilla.
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Sure, just convince 6 Republican House members to start.
By straight math, 3, but it's really likely done now.
There are 3 congress critters already out, one only temporary, two require an election and thus will be 60 - 90 days out.
TL;DR:
Doug LaMalfa, (R) California, died Sunday. The US Constitution requires that house seats be filled by special election and Doug LaMalfa's seat was gerrymandered to the Democratic Party in response to Texas' gerrymandering out 5 Democratic party seats.
Jim Baird (R) Indiana is out after a horrific crash, but "should" return. (And I
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What a mess.
Point stands, all this madness is really on the backs of those less than 20 people if they wanted to find some courage, balls, morals, whatever you want to call it.
It's really the point that everyone will get mad at Trump and that is correct but we mustn't forget that this is all sanctioned and approved by the Republicans running Congress. Thing is Republicans no longer believe that Congress has a role, responsibilities or any role to play, they've ceded that over. When we talk about the syst
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Doug LaMalfa, (R) California, died Sunday. The US Constitution requires that house seats be filled by special election and Doug LaMalfa's seat was gerrymandered to the Democratic Party in response to Texas' gerrymandering out 5 Democratic party seats.
Yes, but the special election for LaMalfa's seat will be held with the existing district boundaries (the map changes do not take effect until the next election cycle). The existing district is heavily republican, so it is expected that another republican will be elected (probably; special elections tend to have low turnouts, so the results are occasionally eyebrow raising). However, the primary election (which may occur on/around the same date) would use the new maps, which can mean total confusion for vo
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jacks smirking reven: What a mess.
It is in the interest of the parties to make the situation a case of "A curse on both your houses" so that their respective dedicated bases don't have to outvote the majority of people that feel "let me get on with my life and don't bother me" that just want the government to work and not have to expend time, effort and thought about it. If you recall the Monty Python skit "Argument Clinic", this is about the state of was passes for news. (It's on YT if you'd like to review.) I will say that "news" has neve
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It is in the interest of the parties to make the situation a case of "A curse on both your houses"
No, this is in the interest of Republicans way more. This framing helps them, when you find a "both sides suck" person chances are they are conservative deep down, ask them who they voted for.
"let me get on with my life and don't bother me" that just want the government to work and not have to expend time, effort and thought about it.
No, that's something people say but don't actually believe, again, this is Reoublican framing.
If people cared about government working they wouldnt have voted for the guy and party who consistently want to make government not work and voted for the people who actually want to try to make it work.
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If people cared about government working
They don't care if it's working, that wasn't my point. They don't care if it works or not, they don't want to be bothered by it not working. As general rule, the republicans have quietly sabotaged things for decades, then loudly say "It doesn't work!, we have to kill it off!" then bother the airwaves with it until Hell won't have it about how We Must Do Something About It.
Example:
Massive day care fraud!? We must cut off all funds! (Never mind the fraud was already discovered and stopped 5 years ago.) That s
Shame (Score:5, Insightful)
Maybe a Pollyanna view of the world but it is a mark of the degeneracy of government (and maybe of the country) that laws like this are required instead of a sense of shame or possibly the threat of tar and feathering to keep the most egregious abuses in check.
Any high-mindedness has fallen. We are a nation of whores.
Re:Shame (Score:5, Interesting)
But the endurance of Trump has shown everyone that, as long as you have no sense of shame, and a knack for changing the subject, you can in fact survive anything in politics, including breaking the law.
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You are correct. There was a time not so long ago when an appeal to shame [youtube.com] ended the career of a grandstanding, lying dilettante. Lots of other politicians or campaigns have stepped down/aside when certain unflattering facts - plagiarism, crude jokes or pictures, sexual improprieties, not-illegal-but-really-shady-dealings - came to light. What forced them? Ultimately their own sense of shame, or the certainty of defeat in the next election.
But the endurance of Trump has shown everyone that, as long as you have no sense of shame, and a knack for changing the subject, you can in fact survive anything in politics, including breaking the law.
If it took Trump to "show everyone", then "everyone" hasn't been paying attention. This common tactic of Kings, Dictators, Generalissimos, Popes, and Presidents has been around for as long as there have been governments.
As well-informed and educated people, you'll of course recall that serial adulterer and sex predator William Jefferson Clinton served two full presidential terms and continued to be a powerful political kingmaker, fundraiser, and global influencer for another 20 years despite decades of beha
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How about all the people who condemn others for committing acts of "body shaming", "slut shaming", etc? It wasn't Clinton refusal to display shame for screwing an intern in the oval office?
It has nothing to do with Trump. Shame, a key part of self-regulation, has been under attack for over 60 years.
Why so limited? (Score:1)
People outside of government can game Polymarket et al. Why is this legislation only aimed at elected officials?
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That would be nice too, but if the bill pertains onky to predictive markets then it would not have the desired effect.
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Only
Stupid typos.
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Private sector people can experience conflict of interest too, and are subject to existing insider trading laws.
Jeopardy (Score:3)
I'll take "Things that will never happen" for $2,000, Ken.
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Player 1: I'll take Guilty Wagers for $500
Ken: NATO's new name after the removal of US membership for 500:
Player 1: What is NEATO?
Ken: Correct, North-Eastern Atlantic Treaty Org.
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Small self-correction. The commodity markets are largely designed for insiders - they are made to allow large oil producers and consumers to hedge their risks with regard to their own future production or consumption. So while in the equity market you wont see TSLA run a trading desk to make profits by frontrunning traders/shareholders before it reports earnings, in commodities this is widespread (e.g. Exxon has surely used its knowledge of energy prices to trade against a shareholder). This behavior is not
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Insider trading bans are bullshit. The reason we want markets is price discovery. We want to know that the world needs more oil and less coffee than it needed yesterday. We get there by having people bet on the price of oil, rewarding the informed and ruthlessly culling the uninformed by separating them from their money. The price then motivates producers and consumers to change their behavior, avoiding overproduction or overconsumption.
I don't see how that makes sense. First, some events would clearly enable 'price discovery', like a revolution/civil war in Saudi Arabia is probably a clear indicator that oil may suddenly become more scarce, or at least people will need to find new suppliers. Capture of Maduro is far less clear, given that the same party is still in power in Venezuela, or that it's not clear if it's even possible to convict him of anything at all. The only thing that's certain is there will probably be more chaos in Venezu
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> Capture of Maduro is far less clear, given that the same party is still in power in Venezuela, or that it's not clear if it's even possible to convict him of anything at all.
There is a lot of dough in translating events to prices. If you knew two weeks ago that Maduro will be captured, you could've bet on Exxon (oil good). You could've bet against Exxon (Chevron works in Venezuela and will now trounce Exxon). Many ways to read the tea leaves, only some correct. But that's the point of "the rich get ric
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The earlier you know the better. For example some people want us to make changes to forestall global warming now, not when the droughts and other predicted effects have "definitely happened".
That's just science though. Like, we can speculate with a high degree of certainty that in billions of years the Sun will turn into a red giant, likely ending any life that exists in the Solar system and then cool down, in spite of how far in the future that is. Non-living things behave in very predictable ways once you understand the laws of physics that govern them. Humans and their activities are very complex and much harder to predict.
With markets, there is no need for the inference to be explainable to any one person, much less a layman. We just let a bunch of overconfident monkeys make their assertions, and after some time we cull the ones who got it wrong. The ones who are correct get more votes over time. Why were they correct, are they using insider info? Who cares.
So the argument is that the system will financially reward people wit
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> Let's assume for now that they've predicted things correctly because they were smarter, that their smartness, if it exists, benefits society, aside from any other of their qualities, let's set all these question aside. In that case, how does insider trading fit into this system? People who got inside information did so because they lucked into being in the right place at the right time, not because of ability to make correct predictions. They won't be able to make correct predictions next time, so the
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By the way, today I got Hunterbrook Media's yearly recap, which begins like this:
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But really, our business model is simpler than that.
We get paid to be right, to be rigorous. Because if the reporting is wrong, the investment or the lawsuit fails. And the reverse is also true. Markets and courts, while severely flawed, are
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Non-public information has an impact on the price even when insider trading is illegal because its impossible to make it illegal to not do a trade you otherwise would have done. A ban does not make it fair. Insiders still come out ahead in aggregate.
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You probably know that it goes beyond that. We all know of the SEC Rule 10b5-1 trading plan abuses from recent years - file a trade that will happen in 6 months, when your current insider information will be obsolete. In 6 months, you have more info, and you can cancel the trade shortly before it happens using that info. It is my honestly held belief that the entire insider trading framework is a kludge made to satisfy the fairness instinct of laymen, consequences be damned. You can see it in how different
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IMO insider trading rules exist to stop employees from placing winning bets, ensuring the game remains rigged on the side of already wealthy shareholders. If we allowed employees to insider trade, the prices would actually be -more- accurate.
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Except insiders are insiders not just because they have inside information but because they have *influence* on events leading to price changes. What you're doing is advocating for the legalization of yummy conflicts of interests which pits people's mission for an organization against their own influence on manipulating future events for personal profit.
Sounds weapons grade stupid to me.
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> lets see if its not already covered by some other law (e.g. fiduciary duty) and then we can talk
> Anyone can make stupid postulations - many people's initial objection to prediction markets back in the day was that they'd be used for assassinations.
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This has already happened with rationalists betting on each other's weddings, iirc there was even a CEO who rattled off a bunch of keywords on an earnings call because there was a market on whether the topics will be raised in the earnings call. Contrary to expectations, prediction markets did not immediately implode.
BTW you can short META and try to kill Zuck right now, yet somehow stock markets have not caused the apocalypse. It's truly a mystery!
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The president bets that the president will demand the arrest of someone.
The president demands the arrest of someone.
The president makes sweet sweet cash.
Only if some other people bet against the president.
Prediction market payouts aren't independently funded by a pre-existing vault of gold bars donated by the organizers. The payouts come directly from the losers.
Anyone who bets against "Leslie will take X action" when Leslie can participate in the betting is, indeed, a real loser.
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Anyone who bets against "Leslie will take X action" when Leslie can participate in the betting is, indeed, a real loser.
The problem I have with people who think compulsive/poor gamblers only hurt themselves and just "get what they deserve" is that compulsive/poor gamblers steal money from people around them to feed their problem/disease, and also have dependents who are in no position to shield themselves from the consequences of those actions.
As usual, if every person was an island, life would seem much mo
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Theft is already a crime.
> But what is the societal upside of allowing a company to exploit "real losers" in this case?
Every regulation has costs. Every single one. Even if we ignore all the ink already spilled on efficiency and price discovery, the onus is on the regulator to justify the burden that he imposes on society. Even our current nanny states are not paternalistic enough to ban sports betting and other gamified gambling, so how can that be the basis for banning insider trading of all things?
I'm Torn (Score:3)
This bet everyone is complaining about isn't just insider trading, it's also a national security leak. I think that is a larger concern.
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Think of it like polling, you get a view into what people think will happen. And they do it with a strong enough belief that they back it up with cash. This doesn't apply to casino gambling of course.
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Think of it like polling, you get a view into what people think will happen. And they do it with a strong enough belief that they back it up with cash. This doesn't apply to casino gambling of course.
Exactly!
"Prediction Markets" (Score:5, Insightful)
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Insider information is already banned with the stock exchange, but we see how much that had mattered with Nancy Pelosi's trades. Why do you think it would matter even for government officials? We see that it's already being ignored in the stock exchange.
At what cost? (Score:2)
Very limp (Score:2)