Mapping 5 Fronts of the Prediction Markets Regulatory Battle

Manatt Financial Services Partner authored an article for Law360 on the rapidly escalating regulatory battle over prediction markets and what it means for the compliance obligations of a wide range of organizations beyond the platforms themselves.

Wolk maps five simultaneous fronts shaping the legal landscape: federal preemption disputes between the CFTC and multiple states, a new wave of criminal insider trading enforcement actions, an unresolved jurisdictional collision between the SEC and CFTC over prediction market ETFs, congressional legislation targeting government officials trading on prediction markets and expanding state-level legislative resistance. Wolk argues that the stakes extend well beyond prediction market operators to financial institutions, investment managers, technology companies and any organization whose employees have access to material nonpublic information that could influence a binary outcome.

“The legal landscape around the prediction markets is evolving faster than most compliance programs were built to track, and the enforcement record suggests that regulators are not waiting for the market to catch up,” wrote Wolk.

Law360 subscribers can read the full article .

This is the second in Wolk’s series on emerging regulatory challenges in financial markets. Read his first article on AI and investment adviser fiduciary duties .