Former Government Employee Fined for Insider Trading on Prediction Markets

What a mess. Someone really burned their fingers this time – and badly. Gabriel Perez, a former White House teleprompter operator, used inside knowledge about Donald Trump’s speeches to line his pockets on prediction markets. Now he’s in hot water for exactly what insider trading entails: gaining an unfair advantage. The CFTC has held him accountable, and rightly so.
Digging your own grave
Perez had access to the final versions of Donald Trump’s speeches – exclusive insight that few others possessed. And what do you do with such knowledge? Exactly: you exploit it. On platforms like Polymarket, he placed bets on specific phrasing or name drops in speeches before they were even delivered. Sounds clever? It was – until the CFTC caught on.
Between June 2020 and October 2021, Perez raked in over $107,500. Not bad for a few bets he shouldn’t have placed in the first place. The CFTC accused him of violating regulations – and that’s putting it mildly. He engaged in market manipulation by using non-public information for personal gain.
How the scheme was uncovered
The CFTC didn’t stumble upon this by accident. The agency combined market analysis with internal investigations and noticed unusually high trading volumes in the hours leading up to speeches. Even more suspicious: Perez’s predictions were so precise that they almost perfectly matched the actual content of the addresses. A textbook case of insider trading.
In March 2023, Perez was finally arrested. And now? He’s settled with the CFTC: a $250,000 fine, a ban on trading on prediction markets, and



a five-year ban from working in the U.S. financial sector. Harsh? Absolutely. But well-deserved. The CFTC made it clear: whether it’s stocks, crypto, or prediction markets – those who gain unfair advantages will be held accountable.
Prediction Markets: Lawless Frontier or the Future?
This case again raises questions about the regulation of prediction markets. Some operate in legal gray areas, while others face strict oversight. Platforms like Polymarket or Kalshi are well-known, but not all providers play by the same rules.
CFTC Chair Rostin Behnam recently put it bluntly: “Prediction markets can provide valuable information, but they must not become playgrounds for insiders.” And that’s exactly what happened here. Perez exploited his prior access to information that others lacked – and that simply isn’t fair.
What does this mean for the future?
For the industry, this case is a warning. Trading on non-public information doesn’t just risk financial losses – it can lead to severe legal consequences. At the same time, the case shows that regulators are willing to monitor even niche areas of the financial world.
Some providers may try to evade oversight using decentralized technologies like blockchain. But will that work long-term? I’m skeptical. The CFTC and other agencies have shown they won’t give up easily.
Gabriel Perez’s story is a classic example of how insider trading knows no bounds. Whether in stocks, cryptocurrencies, or prediction markets – those who gain unfair advantages will sooner or later face consequences. And that’s a good thing.