With news that a U.S. soldier was arrested for winning $400,000 for Polymarket bets on Maduro’s capture, there hasn’t been a huge coverage of politicians voting on insider in their races on Kalshi. This isn’t politicians betting on insider information on government actions, and these aren’t large amounts being bet, but it is still showing that politicians are willing to bet using insider information. Pelosi’s picture is added here, not because she was implicated in these particular trades, but because she has been the poster person for insider trading by politicians.
Henry Manne wrote a famous book on insider trading where he argued that whether insider trading should be prohibited should be up to the company whose stock would be traded, but it is much harder to think of a similar justification for letting politicians engage in insider trading.
From Kalshi:
Case 1: Minnesota Democratic Primary
Our systems alerted us to a candidate in the Democratic Primary for Minnesota’s 2nd Congressional District who had traded a small amount on the outcome of his own election.
After running its investigation, the surveillance team used internal information obtained from the trader and open source intelligence to confirm that the identity of the trader was the same as the candidate. The candidate was then alerted to the rule violation and quickly negotiated a settlement. As part of that settlement, he acknowledged that the trading activity violated Kalshi exchange rules, agreed to pay a fine of $539.85, and to a suspension from Kalshi for a period of 5 years.
Case 2: Texas Republican Primary
We also caught suspicious trading from a candidate in the Republican Primary for Texas’s 21st Congressional District. He traded a slightly larger amount on the outcome of his own election than the first case, but still fairly small.
Same scenario as above: our systems screened the person and saw that he was trying to trade on his own election. We pre-emptively blocked the trader and ran a full investigation. When we contacted the trader, he was fully cooperative with the investigation and agreed to settle acknowledging the rule violation, paying a fine of $784.20, and accepting a 5-year suspension.
Case 3: Virginia Democratic Primary
We found a candidate for the Democratic Primary for Virginia’s U.S. Senate election who traded in two markets related to his campaign. The first was a market on individuals who would run for public office in 2026. This person placed a trade on himself in this market. Then, once the trader announced himself as a candidate for the Democratic Primary election for Virginia U.S. Senate, he again traded on his own candidacy.
0 Comments