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MyComplianceOffice has expanded its compliance platform to cover prediction markets, adding those trades to the same review process it uses for employee dealing, conflicts, disclosures and possible exposure to material nonpublic information. The company also launched AI-assisted surveillance of employee messages on platforms including Slack and Telegram, according to an InvestmentNews report.
The move reflects growing scrutiny of prediction markets such as Kalshi and Polymarket as financial firms weigh insider-trading and compliance risks around contracts tied to companies, earnings, mergers, elections and other market-moving events.
MCO says prediction-market activity can now be reviewed alongside messages and disclosures
According to the report, MCO extended its personal trading and digital asset controls to prediction markets so compliance teams can review trades alongside employee communications and other risk indicators.
John Kearney of MCO said the company is categorizing prediction activity to separate security- or company-based contracts from areas such as sports betting. He also said MCO is looking to use AI to connect a prediction to a specific business entity or stock-market event, such as a merger or acquisition.
Kearney told InvestmentNews that interest has risen quickly as regulators pay more attention to the category. He said prediction markets have become a new way for employees with access to material nonpublic information to potentially get around existing firm controls.
Firms and regulators are tightening oversight of Kalshi and Polymarket
InvestmentNews cited Pew Research Center data showing combined monthly volume on Kalshi and Polymarket rose to $53 billion in July from $26 billion in May.
As activity has grown, firms have started drawing harder lines. The report said Goldman Sachs barred staff from betting on contracts tied to specific companies, elections, market performance, economic data and geopolitics, while still allowing sports and entertainment contracts. Bloomberg, as cited in the article, also reported that Point72 Asset Management and Balyasny Asset Management banned personal-account trading on prediction platforms outright. JPMorgan Chase separately told employees to limit participation in markets involving the bank.
The Commodity Futures Trading Commission’s enforcement division reminded traders in February that it can pursue misuse of confidential information on prediction markets. The article also referenced a July case in which a White House teleprompter operator was placed on unpaid leave amid a CFTC investigation into alleged Kalshi bets, as well as an insider-trading investigation involving an employee of YouTube creator MrBeast.
For readers following prediction markets, the immediate takeaway is not a change in consumer rules but a sign that trading on these platforms is drawing closer compliance review inside financial firms. The article did not say which specific contracts MCO can currently monitor or identify any named clients already using the new tools.
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Source: As reported by Andrew Cohen.
