While federal enforcement priorities under the current administration have slowed some white-collar investigations, scrutiny of securities and corporate misconduct remains active. Practitioners should monitor three specific areas for the year ahead: the regulation of prediction markets, the future of rule 10b5-1 insider trading cases, and a new corporate self-disclosure policy from the Department of Justice.
Regulation of prediction markets
Booming prediction markets allow traders to place bets on a wide range of events, from sports outcomes to political occurrences. Trading volume on these platforms reached approximately $1 billion during the Super Bowl on Kalshi, with a single wager on the first song of Bad Bunny’s halftime performance valued at $100 million. With minimal regulation, these relatively new markets are susceptible to trading activity based on non-public information and manipulation.
For example, a trader made more than $400,000 betting on when Venezuelan President Nicolás Maduro would be deposed and was later criminally charged for allegedly using classified information obtained as a U.S. Army soldier. Another instance involved Coinbase CEO Brian Armstrong, who mentioned specific crypto-related words during an earnings call after traders had placed bets on his speech content. The United States Commodity Futures Trading Commission (CFTC) asserts exclusive jurisdiction over these markets, characterizing event contracts as transactions involving swaps under the Commodity Exchange Act.
This characterization attempts to preempt state gambling regulations. A divided panel of the Third Circuit recently sided with the CFTC, affirming a preliminary injunction against a state ban. However, opposition has grown. Utah Governor Spencer Cox questioned the agency’s authority over the “derivative market” of sports events, and Arizona’s Attorney General criminally charged Kalshi for violating state gambling laws. In response, the CFTC sued Arizona in federal court to bar the prosecution, winning a preliminary injunction.
The CFTC’s efforts to exert exclusive jurisdiction over prediction markets do not necessarily reflect an intent to implement extensive regulatory oversight. The CFTC recently withdrew proposed rules from the Biden Administration that would have prohibited event contracts related to sports and politics. Instead, the agency seeks public comment on how to regulate insider information and prevent manipulation. Staff advisories now encourage market operators to be proactive in surveillance. This approach mirrors the regulatory treatment of cryptocurrency, where the Department of Justice can prosecute fraud using traditional tools regardless of the asset’s classification.
Following the death of Iran’s supreme leader, Kalshi refused to pay out roughly $50 million in bets on the timing of his fall, stating that “profiting from death is not allowed on Kalshi.” This response prompted several members of Congress to propose amending the Commodity Exchange Act to prohibit contracts involving war or death. As these markets grow, the potential for intense government focus increases.
Insider trading — rule 10b5-1 plans
Rule 10b5-1 of the Securities Exchange Act provides an affirmative defense against insider trading for corporate executives and board members who create trading plans before acquiring material non-public information. In 2023, the DOJ announced its first-ever insider trading prosecution based entirely on trades made pursuant to a rule 10b5-1 plan. Former Ontrak CEO Terren Peizer was convicted after the DOJ alleged he violated a 30-day cooling period required by the SEC.
Peizer received a pardon this year, and no other federal cases have followed, casting doubt on the administration’s willingness to pursue similar cases. That said, state authorities may continue to investigate. In January, New York’s Attorney General sued the former CEO of Emergent BioSolutions for alleged insider trading using a rule 10b5-1 plan under the state’s Martin Act. The Manhattan District Attorney has noted the Martin Act can be deployed to complement other regulators and prosecute cases that cannot be brought federally.
Corporate self-disclosure
On March 10, 2026, the DOJ issued its first-ever corporate enforcement policy for criminal matters. Designed to promote uniformity and fairness, the policy supersedes office-specific policies. It incentivizes companies to self-disclose misconduct by promising to decline criminal prosecution if the company voluntarily self-discloses, fully cooperates, timely remediates the misconduct, and faces no aggravating circumstances such as recidivism.