WASHINGTON — U.S. regulators are scrutinizing prediction-market trading tied to the words public figures will use, after a White House teleprompter operator was investigated over alleged insider trading on contracts linked to President Donald Trump’s speeches.
The Commodity Futures Trading Commission is investigating Gabriel Perez, a longtime Trump teleprompter operator, over trades on Kalshi’s so-called “mention markets,” according to sources familiar with the matter. The contracts allow traders to wager on whether public figures will use particular words or phrases during speeches or other public appearances.
Kalshi detected the trades through its customer-screening and market-surveillance systems and referred the matter to the CFTC, according to Reuters. The platform froze more than $90,000 in potential profits before the money could be withdrawn, one source said. Perez has cooperated with the federal investigation, according to people familiar with the case.
The White House placed Perez on unpaid leave after the allegations emerged. The White House later said he would no longer work there, according to the Associated Press. The CFTC has declined to confirm or deny the investigation publicly.
The case has drawn attention to a broader regulatory concern: whether people with advance access to information about public statements can exploit prediction markets before that information becomes public. In a June letter to the CFTC, Democratic senators including Michael Bennet, John Hickenlooper and Amy Klobuchar said mention markets can be particularly vulnerable to insider trading when an outcome is already known to someone before a contract expires.
Kalshi’s head of enforcement, Robert DeNault, said the company’s surveillance team “promptly flagged and referred” the trades to the CFTC and was cooperating with regulators.
The scrutiny comes as prediction markets expand rapidly. A Pew Research Center analysis found that Kalshi and Polymarket offer contracts covering subjects including public figures’ statements, although such markets represent only a small share of their overall trading volume.
Kalshi on Aug. 10 announced a multiyear partnership with Nasdaq to strengthen trade surveillance, citing the need to detect potential market manipulation and abuse as the industry grows. The latest confirmed status of the Perez matter is that it remains under federal regulatory scrutiny, with no publicly announced final enforcement resolution.
