The federal government’s focus on securities and corporate misconduct has shifted as priorities under the current administration have changed. While federal prosecutions of white-collar crimes have generally slowed, regulators are still targeting specific areas of fraud. Market insights from recent months highlight three sectors where legal and enforcement actions are intensifying. These areas include prediction markets, 10b5-1 trading plans, and corporate self-disclosure policies. The following details outline the current situation for each.
Regulation of prediction markets
Platforms that let users bet on the outcome of events, such as sports results or political developments, have grown quickly. Kalshi, one such platform, handled more than $1 billion in trading volume related to the Super Bowl, with $100 million of that wagered on the first song of the halftime show. These markets allow participants to trade on nearly any subject, but they also create opportunities for manipulation. A trader made over $400,000 betting on the timing of the Venezuelan leader’s ouster and was later charged with using classified information. In another instance, a company executive made comments during an earnings call that he knew were being bet upon, a practice that raises questions about fair access to information.
The CFTC views event contracts as transactions involving swaps, on the grounds that they are contracts dependent on the occurrence of another event, and therefore within its jurisdiction under the Commodity Exchange Act. The CFTC’s Chair announced that the Commission would “see you in court” to those “who seek to challenge [the CFTC’s] authority in this space” A divided panel of the Third Circuit recently sided with the CFTC, affirming a preliminary injunction in favor of Kalshi Despite this federal support, multiple states have pushed back. Utah’s governor questioned the CFTC’s authority over what he called a derivative market involving sports statistics. The legal battle over jurisdiction is likely to continue through the courts.
Related Post: Law firm negligence did not cause client loss
The CFTC recently withdrew proposed rules from the Biden Administration that would have prohibited event contracts related to sports and politics. The agency now seeks public comment on how to prevent insider trading and manipulation. It has also issued a staff advisory encouraging platforms to strengthen surveillance and monitoring. Meanwhile, Congress is considering legislation. A bipartisan group of senators expressed concern that the CFTC is improperly regulating sports betting. A separate bill would prohibit federal employees from trading on prediction markets.
Corporate self-disclosure
On March 10, 2026, the DOJ issued its first-ever corporate enforcement policy for criminal matters. Designed to promote “uniformity, predictability, and fairness” in how DOJ pursues white-collar matters It outlines the factors the government considers when evaluating a voluntary disclosure. Agencies are using the policy to determine if a company’s cooperation is genuine.
Insider trading — rule 10b5-1 plans
Corporate executives can sometimes avoid insider trading accusations by using rule 10b5-1 plans. This rule provides an affirmative defense if an executive creates a trading plan before they possess material non-public information. A plan entered into in good faith is generally considered safe. In 2023, federal prosecutors charged a former company CEO with insider trading for violating the terms of his 10b5-1 plan. The case centered on a failure to observe a mandatory 30-day “cooling period” between when the plan was created and when the trades were executed. The executive was convicted and sentenced to prison, marking the first time the Department of Justice used this defense as the sole basis for a prosecution.
Related Post: Kerala court rejects marriage vow as valid consent defense
Corporate self-disclosure policies
The document aims to create uniformity, predictability, and fairness in how the government pursues white-collar cases. This policy supersedes any older guidelines that had been in place within specific DOJ components or U.S. Attorney’s offices, with the exception of antitrust matters. The policy specifically encourages companies to voluntarily self-disclose misconduct to an appropriate DOJ criminal component.
The new policy provides clear conditions under which the DOJ may decline criminal prosecution of a company. Prosecution may be declined if the company voluntarily self-disclosed the misconduct, fully cooperated with the DOJ’s investigation, and timely and appropriately remediated the misconduct. Additionally, the policy requires that there be no aggravating circumstances related to the nature of the offense, the egregiousness of the misconduct, the severity of the harm caused, or the company’s history of recidivism. Recidivism is defined as a criminal adjudication or resolution based on similar misconduct by the entity within the last five years.
The policy also outlines how the DOJ should handle “near-miss” voluntary disclosures. In these situations, a company may be offered a non-prosecution agreement if it timely and appropriately remediated the misconduct but does not qualify for a declination because its self-report did not meet the strict definition of a “self-disclosure.” The policy establishes a framework for how companies should approach internal investigations and reporting obligations in the future.