Prediction Markets and Corporate Compliance — Why Companies Should Act Now

In this article, Sidley partners Katie LaVoy, Holly Gregory, Matthew Podolsky, and Martin Wellington explain that the rapid growth of prediction markets is creating new compliance and insider trading risks for organizations that possess confidential information. It argues that regulators are increasingly willing to apply existing fraud and insider trading laws to prediction market activity and recommends that companies proactively update their insider trading, confidentiality, and ethics policies to address trading in event-based contracts before compliance and enforcement risks escalate.