DOJ's Post-Chastain Playbook: How Insider Trading Theories Are Expanding Into Prediction ...
jdsupra.com
The DOJ is stretching insider trading law into prediction markets — and the same theories that jailed an NFT manager are now the blueprint for prosecuting a whole new frontier of financial crime.
Misappropriation TheoryClassical Insider Trading TheoryPrincipal-Agent ProblemInformation Asymmetry
Theory Briefing
- The Chastain NFT case established that misusing confidential information for personal gain counts as insider trading, even outside traditional stock markets.
- DOJ is now applying classical and misappropriation theories to prediction markets, where traders can profit from non-public knowledge about real-world events.
- Overlapping liability frameworks mean participants in prediction markets face prosecution risk from multiple legal angles simultaneously, with few established safe harbors.