Prediction Market Exchange Suspends Traders for Insider Trading Violations

Kalshi, a regulated prediction market exchange, suspended two traders in unrelated enforcement actions for engaging in prohibited transactions involving influence over event outcomes and the use of material non-public information. 

In one disciplinary action, a person identified as "Langford" announced his candidacy for Governor of California and so was listed as a market option in the 2026 California Gubernatorial Election contract traded on Kalshi. According to the notice issued by the Kalshi Disciplinary Committee, Langford then entered into a transaction on that contract. As a candidate, Langford was a direct decision-maker with influence over the outcome of the event that was the subject of the contract and thus was prohibited from trading on the contract under the Kalshi rules. Langford acknowledged that the trades were improper.

In a separate disciplinary action notice, the Kalshi Disciplinary Committee found that a second trader participated in event contracts related to a Mr. Beast YouTube channel while employed by, or legally affiliated with, the channel’s "Source Agency". Kalshi concluded that the trader executed trades based on material non-public information obtained through that employment. Kalshi also determined that the trader failed to cooperate promptly and fully with the exchange’s investigation into the activity.

Kalshi found that the first trader violated Rule 5.17(z) ("Prohibited Transactions and Activities"). The exchange determined that the second trader violated Rule 5.17(y) as well as Rule 3.6(a) ("Obligations Applicable to all Participants"). 

Langford received a five-year suspension from accessing Kalshi and a financial penalty of $2,246.36, which included both disgorgement and a $2,000 penalty. The second trader received a two-year suspension and a financial penalty of $20,397.58, including disgorgement of profits.