David I. Miller, the CFTC's new Director of Enforcement, spoke at NYU Law School's Program on Corporate Compliance and Enforcement on March 31, and the topic selection alone tells you where the agency's attention is heading: insider trading in prediction markets.
Who Is David Miller?
Miller brings a prosecutorial pedigree to the role. He spent a decade in public service, including time as an Assistant U.S. Attorney in the Southern District of New York — the office that has handled some of the most significant financial fraud cases in the country. Since 2014, he's been in private practice at Morgan Lewis and Greenberg Traurig.
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In his remarks, Miller emphasized his return to public service:
"I am incredibly fortunate to have the opportunity to return to public service... I had the good fortune to be a federal prosecutor in multiple offices of the Department of Justice."
— David I. Miller, Director of Enforcement, CFTC, NYU Law School Program on Corporate Compliance and Enforcement
That background matters. Directors who came up through DOJ tend to approach enforcement differently than those who came up through regulatory examination programs. Expect an emphasis on fraud, manipulation, and market integrity cases that can be proven beyond a reasonable doubt — even when the CFTC's civil standard is lower.
Why Prediction Markets Are on the Radar
The title of Miller's remarks is the tell: "Insider Trading in the Prediction Markets." The CFTC has been expanding its oversight of event contracts — the contracts that let you bet on election outcomes, weather events, and other non-traditional underliers. Platforms like Kalshi have pushed the boundaries of what event contracts can cover, and the Commission has been wrestling with where to draw lines.
Insider trading in these markets is a real concern. If you know the outcome of a corporate board vote before it's announced, or have non-public information about a regulatory decision, trading on that information in a prediction market is just as problematic as trading on it in the securities markets. The CFTC is signaling it intends to treat it that way.
What This Means for Compliance Programs
If you're running compliance for a firm that operates or trades on prediction market platforms, this speech should prompt a few specific actions:
- Review your insider trading policies. Do they cover event contracts? Most policies were written with securities and traditional derivatives in mind.
- Assess information barriers. If your firm has access to material non-public information that could affect event contract outcomes, your information barriers need to account for that.
- Monitor trading activity. Surveillance systems should flag unusual activity in event contracts, particularly around predictable information release dates.
The Broader Signal
Miller's appointment and his choice of topic suggest the CFTC Enforcement Division is going to be active. The agency has historically been resource-constrained relative to the SEC, but it compensates by being selective and aggressive on the cases it does bring. A Director with SDNY experience knows how to build cases that stick.
For firms in the derivatives space, this is a good time to ensure your compliance programs are current — not just on paper, but in practice.
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Key Takeaways
Does the CFTC have authority over insider trading in prediction markets?
Yes. The CFTC has anti-manipulation and anti-fraud authority under the Commodity Exchange Act that covers trading in event contracts on CFTC-regulated platforms. Section 6(c)(1) prohibits manipulative and deceptive devices, which can include trading on material non-public information.
Do my firm's existing insider trading policies cover prediction market activity?
Probably not explicitly. Most insider trading policies were written for securities and traditional commodity derivatives. If your firm trades event contracts, you should review and update your policies to specifically address prediction market instruments.
What kind of enforcement approach should we expect from Director Miller?
Miller's background as a federal prosecutor in SDNY suggests a focus on cases with strong facts, clear legal theories, and meaningful deterrent value. Expect the Division to prioritize quality over quantity, with an emphasis on fraud and manipulation cases.
The content in this blog is for informational purposes only and does not constitute legal advice, regulatory guidance, or an offer to sell or solicit securities. GiGCXOs is not a law firm. Compliance program requirements vary based on business model, customer base, and regulatory classification.