This is an interesting decision. Although it is a loss by Kalshi, it is by no means a total loss.  

CEA Section 5c(c)(5)(C) provides that the CFTC may determine that event contracts are impermissible if they involve, among other things, (i) an "activity that is unlawful under any Federal or State law"; or (ii) "gaming."  Certain of the prior decisions have largely focused on whether the activity constituted gaming and might be per se unlawful.  …

This should serve as a reminder to firms that it is not permissible for a broker-dealer to enter into reverse repos where it has a security interest in the collateral through a triparty custodian, as opposed to holding the securities directly.  

The requirement imposed by the prior Administration at the SEC that CAT collect personal data, along with trading data, was reckless. (See .)

Anyone who runs a database that holds customer information knows that the information is both valuable to have and dangerous to hold. It makes the data repository a target for bad actors. Requiring that FINRA hold personal data, in combination with trading data, made FINRA into one of the most valuable targets in the world, for every kind…

In many cases, the penalties imposed on individual brokers who violate their customer obligations seem quite light, relative to the actual or potential harm. Perhaps this individual broker is a wonderful guy and really intended to repay the undocumented borrowing. But the fact that he also has a disciplinary history for suitability violations seems a relevant problematic fact.