White House insiders put on notice as federal prosecutors look into insider trading

Federal prosecutors were determining if prediction market bets have violated insider trading laws, according to a CNN report Monday.

The heads of the securities and commodities fraud unit in the U.S. attorney's office for the Southern District of New York reportedly met with Polymarket representatives to learn more about how existing laws could be interpreted as part of an investigation into possible misconduct.

Polymarket is one of the leading prediction betting platforms in the growing industry and follows the Department of Justice's inquiry over potential lucrative trades that happened around the capture and arrest of Venezuelan President Nicolás Maduro on Jan. 3.

The industry has appeared to have been "largely uninhibited by federal regulators," and has come under scrutiny.

"As a general matter, our Office meets with market participants to discuss market activity and application of the law," said Nicholas Biase, a spokesperson for the US attorney’s office, in a statement.

“With regard to so-called ‘prediction markets,’ our Office has made clear that various laws, including insider trading laws, anti-money laundering laws, laws prohibiting manipulation, and various anti-fraud laws are applicable to a wide range of observed activity,” Biase said.

It's unclear what specific trades were in question. No companies have been accused of wrongdoing.

“Polymarket sets, maintains, and enforces the highest standards of market integrity. We also proactively work with regulators and law enforcement to reinforce those standards,” said Polymarket spokesperson Carissa Felger in a statement to CNN.