Insider Trading on Prediction Markets: What the CFTC's Two Orders Show

The CFTC has now resolved two matters involving trading on Kalshi mention markets, contracts that settle on whether a person says a word or attends an event. Reporting describes them as grounded in different legal theories.

Santos was charged with manipulating a contract over which he had influence. Gabriel Perez was charged with trading on misappropriated nonpublic information.

Former Rep. George Santos settled on July 31, 2026, after trading on whether he would attend the State of the Union address. Reporting puts the outcome at a $17,500 fine plus repayment of $17,569.98 in profit, with a three-year ban from prediction-market trading.

The concern was that Santos made public statements about his attendance that moved the contract price while he held a position in the market. The conduct went to price influence, not secret information.

On August 28, 2026 the CFTC ordered former White House teleprompter operator Gabriel Perez to disgorge $107,539.02 and pay a $65,000 civil penalty, a total of $172,539.02, with a three-year trading ban and a cease-and-desist order. He traded Kalshi contracts on whether the President would use particular words in speeches between December 2025 and February 2026.

The CFTC found he used material nonpublic information from presidential speeches, in breach of a duty of trust and confidence owed as a government employee. The penalty was reduced for cooperation.

Both matters began with Kalshi referrals, and Kalshi's head of enforcement said its surveillance detected the Perez activity. The orders show how the CFTC expects an exchange's market surveillance to feed enforcement.

The CFTC's September 22 Division of Market Oversight advisory cites these matters when it says discrete-conduct contracts are presumptively susceptible to manipulation. Exchanges listing them must show what constrains the person whose conduct decides the outcome.

House Oversight Chairman James Comer has sent letters to Crypto.com, Hyperliquid and PredictIt asking how they flag trades on nonpublic information and whom they have referred to regulators. His stated aim is to assess the extent of insider trading and possibly legislate against trading by government officials.

For compliance teams the practical read is that surveillance, referral records and identity verification are now both a CFTC expectation and a congressional document request. This is analysis of public activity, not legal advice.