DOJ Applies Insider Trading Theories to Novel Prediction Market Contract Case - JD Supra
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The DOJ is stretching insider trading law into uncharted territory — applying misappropriation theory to prediction markets for the first time, with huge implications for how we define information asymmetry.
Misappropriation TheoryInformation AsymmetryPrincipal-Agent ProblemEfficient Market Hypothesis
Theory Briefing
- A Google employee allegedly exploited privileged information to trade prediction market contracts, triggering a landmark DOJ prosecution.
- The DOJ's misappropriation theory argues that using an employer's confidential data for personal gain is fraud — even outside traditional stock markets.
- If the theory holds, this case could redefine the boundaries of insider trading law to cover any market where information asymmetry confers an edge.