The U.S. Commodity Futures Trading Commission (CFTC) penalized former White House teleprompter Gabriel Perez for trading prediction market contracts tied to the wording of President Trump’s speeches using non-public content from upcoming presidential addresses. This case illustrates that as trading volume in prediction markets grows, regulators are extending insider trading enforcement to event-based contracts.
Place bets using advance information from the speech
The CFTC stated that Perez had access to the speech draft prior to its public release due to his work, and subsequently traded contracts based on whether the president mentioned specific terms or phrases in the speech. The settlement of these contracts depends on whether the president uses certain words or phrases during the address.
Regulatory documents state that Perez profited over $107,500 between December 2025 and February 2026 by leveraging this informational advantage. The CFTC determined that this constituted the misuse of confidential government information for trading purposes.
The settlement amount includes recovery and penalties.
Under the settlement agreement, Perez is required to return $107,539.02 in ill-gotten gains and pay a $65,000 civil penalty, totaling approximately $172,000. He also accepted a three-year trading ban and was ordered to cease further violations of the Commodity Exchange Act.
- Forfeiture of illegal proceeds: $107,539.02
- Civil penalty: $65,000
- Trading Ban: 3 Years
The CFTC also stated that the fine was significantly reduced under its new cooperation policy due to Perez's "exemplary cooperation" during the investigation. Regulators also noted that the exchange operator, Kalshi, provided assistance in the investigation.
Prediction markets face increased scrutiny
This is not an isolated incident. The report mentions that earlier this year, a U.S. soldier was charged for allegedly trading on Polymarket using classified information related to military operations, with alleged illegal profits exceeding $400,000. In March, a video editor for MrBeast was also fired amid an insider trading investigation involving Kalshi.
Meanwhile, Kalshi is addressing the backlog of suspicious transaction reviews and has implemented new safeguards in response to concerns about insider market manipulation.
This case arises as prediction markets continue to enter the mainstream, with trading volumes reaching billions of dollars and attracting increased regulatory attention. The CFTC has once again affirmed that event contracts fall within its regulatory scope and are subject to insider trading rules applicable to swaps.